Ashish Munjal, Co-Founder & CEO Sunstone Eduversity chats with Amit Somani, Managing Partner Prime Venture Partners.

Listen to the podcast to learn about

01:00 - Why Ashish Decided to Work on Sunstone

05:30 - Lessons Learned: Right Market & Staying Focussed

08:15 - Making Education Transparent & Accountable

16:00 - Zero-Based Budgeting and How It Helped Sunstone

21:00 - Three Skills Corporate India Looks for When Hiring

27:00 - The Shift from Academics to Skill-Building

29:30 - Opportunities in the Indian Education Space

Read the complete transcript below

Amit Somani 01:10

Welcome to the Prime Venture Partners podcast. I am absolutely delighted to have Ashish Munjal, Co-founder and CEO of Sunstone Eduversity with us. Ashish has been in many startup adventures before. And I’m particularly proud and privileged because we are investors in Sunstone. And I get to work with Ashish and his co-founder, Piyush, a lot. So welcome to the show Ashish.

Ashish Munjal 01:30

Thank you so much Amit and it’s really a pleasure to be here. We have heard a lot of great things about Prime podcast and heard a lot of the podcasts but it’s really a great feeling to be here recording with you.

Amit Somani 01:41

Great, Ashish. And I think as we always say, this is a pay it forward. So I’m sure there are many other Ashish’es, who are going to be listening to this and getting inspired and doing the next big thing. So maybe you can just give us a quick background on yourself, in terms of your entrepreneurial journey, both pre Sunstone, and then a bit with Sunstone founding story.

Ashish Munjal 02:02

Absolutely. So maybe I’ll start quickly with how it all started. And obviously, very typical stuff, engineering, MBA, and then, right after college, I decided that I want to do consulting, so joined Deloitte, it was a short stint, then moved out joined Bank of America investment banking team after three years, realized that it’s a great paying job, but it’s not a career that I want to pursue for next 25-30 years. At that point in time, I moved out and joined a startup here in Gurgaon, named Knowlarity communications, it was the early days of the Indian startup ecosystem, 2012. But really got a hang of things, how startup works, how do you create products? How do you get the initial set of users? It was a Saas play, so I got a hang of the things on the Saas side of things as well as did a lot of experimentation on the growth distribution side.

And after spending one and a half years with Knowlarity, after that I and a colleague of mine, Sameer Grover, both of us moved out and we started a company named Crownit. Crown it basically started as a deals platform where we were pushing more and more business to our partner merchants. We raised our Series A. Piyush also joined very early in the founding team of Crownit and in between, obviously, not all the stories go as you plan. So in between, we also pivoted to become more of a mobile market research platform. So pivot was more evident in terms because we started as a b2c consumer internet platform, and then we pivoted to become more of a b2b sort of story. At that point in time, both Piyush and I decided that eventually we wanted to move out.

So I planned my exit, and I moved out in June-July 2018, and then Piyush followed, and he moved out in November. So it was sort of an understanding between me and Piyush that once both of us move out, we’ll start something on our own. And education has personally for me been really close to my heart. Because I come from a very small town, near the city Meerut. And I have seen the education system, what is there in the tier two, tier three cities of the country up close. And I actually feel very lucky that I have been able to break out and I have been able to get exposure to such a good education system with my MBA and then with my work experiences, but there are a lot of people who I know very closely, who couldn’t get that kind of exposure. And it’s sort of an itch that I always had that I can contribute back for those people who I grew up with that they can also break out, they can also make a good career out of their education. So that was the itch and that’s when Piyush and I started discussing.

In fact very few people know that I started something in 2012, as well, during my Bank of America days in the education space, couldn’t scale that up, shut that down within the first six months itself. So maybe I realized that, now that some of my hair has grown white, I’ve become wiser. So that’s when Piyush and I got together and we spent around six months just figuring out what’s happening in the Indian education space and met everybody whosoever was doing anything. And then we realized that we want to build something in the higher education space. Because there you can create the impact and it’s much more visible in a lesser duration of time because if you start building out something in the K 12 space, it takes a very long gestation period to understand what kind of impact you have created.

So we decided that we want to do something in the education space, we were very clear that we don’t want to target the top segment. So I wanted to build something for the tier two, tier three class consumers. So that’s how the Sunstone came into picture. And that’s the journey about Sunstone and we started with MBA as our first programme because obviously it’s a relatively shorter duration programme. So that’s the story in a nutshell about who I am and where we are.

Amit Somani 06:05

Wonderful. We will talk a lot more about Sunstone and a lot of the education trends you’re seeing. But what were some of the learnings from the Knowlarity and the Crownit experience that you have carried on with a couple of things that you think that was valuable to you?

Ashish Munjal 06:20

So personally, for me, and this can be slightly controversial as well. But I personally believe that choosing the right market is something which is very, very critical. And this is more and more true in the case of Knowlarity because both the founders were great hustlers, they could have built any company. But I think the market that they choose may not be right. And obviously at that point in time, it was 2008. You don’t know what’s the right market size and everything. So choosing the right market is something which is very, very critical. And you can spend maybe six months more before you finally take the plunge. Okay, I want to do this. But you have to be very, very clear that what’s the size of the market? And let’s say five years, seven years down the line, how large can this eventually become? And that also depends on what kind of aspiration you have with yourself.

Amit Somani 07:20

Wonderful, and maybe just a bit about the Crownit experience as well. Because one was b2b one was more b2c. Sunstone is probably a little bit in between as b2b to b2c as well. So anything in that dimension, or just more the particular problem that you end up choosing.

Ashish Munjal 07:38

Absolutely. So in Crownit, we didn’t make that same mistake wherein we chose the right category, because it was a lifestyle spend that we were trying to target. So obviously, the market segment was very, very large. But unluckily for us, if you look globally, nobody has been really able to crack online to offline space, whether it’s the US, Meituan did something in China. But again, they were a multi category, kind of a play, they were doing everything from food delivery to movies to everything. So online to offline was a difficult play. And we were trying to do too many things at Crownit. So we did launch our own meal vouchers, we did launch our own credit card, we did launch our own Crownit vouchers, we were trying to pay through Crownit. So when some things are not working for you, then you try to do too many things at a time. So one learning from Crownit, I would say is that we would have focused maybe much more on one or two things rather than spreading ourselves too thin.

Amit Somani 08:37

Yeah, that makes a lot of sense. So maybe for those of our listeners who are not familiar with sunstone, maybe just a quick sort of tweet level summary on what sunstone is and what it does.

Ashish Munjal 08:51

Sure. So if you look at Sunstone, what we are trying to do is that we are trying to create an education experience for the tier two, tier three college students, which is similar to tier one in nature. So that’s in nutshell, this is exactly what we are trying to do at Sunstone. And we know that, let’s say when we talk about education outcomes, whether we talk about education experience for the students in tier two, tier three category, that’s something which is broken. So whether we talk about the number of students who are able to get into any kind of jobs, or the number of students who have the right employability metrics. In tier two, tier three, we read lot of reports whether it’s NASSCOM, ASSOCHAM that very few students have the right sort of skill set to become employable, whether they get into a job or not, that’s a secondary thing, but what kind of outcome they are getting from their education.

So this is exactly what we are trying to fix. We work in partnership with the colleges, we go to these colleges and work in partnership with these colleges, where we co manage the course and the programme with these colleges. So essentially, the idea is to create an education experience for this category of students, which is something if not at par, but at least the best in this segment in which we are operating.

Amit Somani 10:08

Absolutely. And I think you’re probably underselling yourself. There are many interesting things and I’ll ask about some of those since we’ve worked together for a couple of years. But I loved it when we decided to invest in Sunstone and the thing that both Piyush and you said is you wanted to basically build a company that had accountability in education. And that was quite an alien concept. And I think you started with your first programme, which was the pay after placement MBAs and you only get paid, I mean, the student only pays the fees if they get placed and I know the company has evolved since, but this whole notion of accountability in education, education that works, I think that is phenomenal. So how has the journey been? What are some of the early learnings that you have seen from the market from the student side and from the college side? You also graduated quite a few people, any things you can share with our listeners?

Ashish Munjal 11:03

Absolutely. So when we started, obviously, whenever we used to reach out to colleges, whenever we used to reach out to students, we had this notion, and we still have this notion in our country that if you’re running an education company, you have to be more than 50 years old, or you should come from 20 years of academic experience. So whenever we were reaching out to college, Piyush was the one who actually used to do this thing. But we used to get a very funny kind of comment from the owners, that you are the new India, you are the young India, it was their way of saying that you’re too young to be doing this. But yeah, on a serious note, we did face some challenges when we were going and signing up colleges, when we’re actually trying to convince students that they should be taking a plunge with us rather than going to college, which is 20 years old.

So those were the initial set of challenges. But what we have been able to achieve so far is that we have been able to place our first batch and we stand on 97-98% placements. And as compared to the other colleges, let’s say in the same segment, we see that we have done a phenomenally better job. And obviously, I am the interested party here. Obviously, I like to say that, but that’s what we have seen in student NPS. That’s what we have seen in student outcomes, overall interviews that we do, whatever we are speaking with the corporate, so we see that, okay, this is something which can truly transform the lives of students who are coming and enrolling with us. And one thing which has been our learning as well, and it is something very, very real and impactful is that there are majority, if not majority, there are a large number of students who are coming and studying at Sunstone. And that’s true for the same segment. They’re the first ones in their family to ever go to a corporate.

So you don’t only give or help a student achieve their outcome, you’re actually elevating a family. And I don’t want to say poverty or anything or middle income or lower income, but you’re actually elevating a family who has never worked in a corporation to being working in a corporation. And these are smaller things that we have, because let’s say if I am coming from a family where my dad was working in a firm, I have the notion that okay, getting ready and going to office is something which is very normal. But for these students, that’s also something which they’re doing for the first time in their lives. So it’s something which is a very novelty, very new things sort of new things are happening in our students journey.

Amit Somani 13:42

Yeah, and the other thing which you should probably talk about is the fact that in addition to the lifestyle, the discipline, and getting up and going to work and all that, I think a lot of the skills that are needed by the so called new age India, whether it is, newer companies or existing companies, they’re not taught today. And I think you guys are doing a lot of innovation in figuring out what it is that you need in a new employee, not just the employee needing a job or learning discipline.

Ashish Munjal 14:09

So don’t get me started on that one. So because that’s another big, big beast that we have to tackle. And even if I’ll give you some examples, it will be a sort of mind boggling example. So there are universities and I won’t name them but there are a lot of universities in our country and they are large universities which have not updated their curriculum since the last 10-12 years. And it means that they don’t even have let’s say digital marketing in their curriculum. There are a lot of universities which are still teaching VAT to the consumer to the students and when GST was introduced five years ago, so what a student does is, he first learns VAT and then takes coaching to learn GST later, because ultimately he has to work on a GST if he joins an accounting firm.

So there are a lot of such things and these are only the tip of the iceberg, let’s say even if as a university you have introduced GST in your curriculum that does not complete the task. Education since always has been a black box, like if I am studying in my MBA college and if I am studying let’s say marketing 101 I will only get to know how did I do in marketing 101 At the end of trimester or at the end of my semester, now, I cannot go back in time and re teach marketing 101 to the student I have to move forward and teach marketing 102 to him. And that means that whatever he has not learned in marketing 101, He will never learn those things. So the idea is to completely make this black box more transparent and make it into a real feedback loop kind of a system. So can you generate a lot of data on the students so that you continuously know where your student is going. So what we call this internally is Sunstone learning index.

So we are able to track every student real time on a day to day basis, whether the student is actually learning or he is not learning and is let’s say going down the learning index path so that we can put a remedial action plan for students. And obviously, at a scale of let’s say, 2000, or 5000 students, it is impossible to do this manually. And that is where tech plays a very, very critical role, that you don’t have to do this manual intervention for every student, you have your systems in place, you have your software tech in place, which can actually measure every student’s learning index, and then give remedial action through LMSs. And through a lot of assignments and videos to the student, so that by the time they come back for the next class, they are sort of prepared and they’ve understood the previous concept well.

Amit Somani 16:38

Wonderful. Let’s go back to a couple of more challenging parts of the journey. Everybody talks about all the rosy stuff. I think fundraising was sort of not trivial. And of course, now you have many investors, we have Sama capital, we have Westbridge now, but along the journey, how’s that experience been, number one. Number two, COVID was like a huge impact to the firm. So if you can talk a little bit about some of the not so fun times, and how you and the firm not only survived, but thrived through it, that will be very interesting to our listeners.

Ashish Munjal 17:15

Yes, definitely. So yes, as you said that fundraising for us, it’s not like literally the cakewalk to go and raise funds initially. And obviously, we had seen our share of difficult times, as well. So we started this in 2019. And obviously, we started with a very, very small angel round that we raised. And the initial five, six months were slightly difficult. And I would say, once we raised money from Prime, at least, there was some stability to the things, but then suddenly, and obviously, we were going on our plans and everything that after one year will grow 5x, and this and that, and then suddenly COVID struck. And more than anything, it was the time of uncertainty, which is more problematic for us, then, the real business. And one thing which we also realized at that point in time is that we made certain changes to the business model. So that to make it slightly more of a business which generates slightly more upfront cash, for the lack of better words.

And the reason for that, obviously, is to ensure that because those were uncertain times, we also didn’t want to be in a situation where we don’t know how the next six months are going to pan out for us. And that was also an interesting experiment that we did, because before that time, we were completely pay after placement, sort of a model. And when I look back, I would say that was sort of a lucky thing, but eventually a good thing for us that it panned out in a manner because of that COVID 15-20 days of uncertainty. That was the time we sort of launched an upfront fee model for our students as well. And initially, we were also not very sure how many percent of people would opt for what will happen and because in our mind, we were thinking we were anchoring ourselves more like a pay after placement sort of a brand. But to our surprise in our year one 30% students actually opted for the upfront fee model. And since then it’s actually going up and up.

So today we stand at around 40-43% students who opt for a full upfront fee model. And that also gives us lot of confidence that whatever we are doing for the student, that something really, really meaningful for them, and they actually see a value in us, whatever education you are delivering, whatever activities, whatever training and placement services that you’re doing for this is something really meaningful for us. And I’m ready to put my trust in you. And the fee that we are here talking about is in lakhs. So there’s a lot of skin in the game from the students’ side as well. So that’s why I would say, maybe March 2020 was a challenging time for us. But luckily for us, it’s the students’ love, it’s the students’ trust in us, which has ensured that we easily and very comfortably sailed through it.

Amit Somani 20:16

Yes, I remember vividly the resilience and the grit that you guys had. There is one more thing, which actually, we spoke about, but I learned the term from you, which was the zero based budgeting. And I think we ended up doing that the entire portfolio during COVID wave one, which is we said, look, let’s do this bottoms up from scratch. And what do we do? It reminded me a bit of the Apollo 13 mission where they said we have to bring Apollo 13 back home so we had to figure out everything that’s unnecessary. And yet, kept the team intact and all that so maybe I’ll talk just a little bit about zero based budgeting what that is and any comments.

Ashish Munjal 20:53

So this is something that I personally learned from Shekhar, when we were going through difficult times at Crownit. And we were thinking about how we can turn this company into a profitable company without burning loads of money. And we were coming from that consumer internet hangover where we were in the habit of burning large sums of money every month. So it was sort of a very immediate shift for us. So we were doing some modeling with shekhar .Okay, how much more money would you need if you do this, this and that. And I was just presenting a couple of models to him. And just one fine day he called me, what if you do zero based budgeting? So like, okay, sir, what’s it ,first at least enlighten me about that.

So assume that you’re starting it from fresh and then do whatever you want to do. Don’t decrease or don’t cut down from where you’re sitting currently, just start from scratch. So essentially, it is all about, what are the barebone things, the bare bone expenditures that you need to do? If you have to assume that you are starting from scratch, doesn’t matter where you are, currently assume that you’re starting from scratch, if you have to run the business critical function, what is the bare bone minimum expenditure that you have to do, that’s essentially what is zero based budgeting.

Amit Somani 22:17

Wonderful. Fast forwarding a little bit, now that you have the programme working, and like you said, You graduated many students. Can you talk about what Corporate India whether it’s startups or existing companies, what are they looking for in some of these graduates, and into that degree, if there are entrepreneurs out there, who by the way, we get now a try a lot of pitches saying I’m the Sunstone of this, and I’m Sunstone of that and it heartens my heart, given that we kind of did the seed round with you guys. But what are some of the things that the employers are looking for, in terms of these students in general, not just Sunstone, but even beyond.

Ashish Munjal 22:52

Absolutely. So that’s one thing which actually we have spent a lot of time and resources on, to understand what corporations are looking for. Because this is irrespective of whether we do pay after placement or not. Because eventually the only thing that we stand for is making you career ready, providing you great educational experience, whether you plan to take up a job right now you plan to start your career three years down the line four years down the line that’s secondary. But whatever education we are providing you that should ensure that you get successful, we are able to deliver success to you. And that’s the reason ultimately corporate is where the real rubber hits the ground. So we spend a lot of time and energy with corporations to understand what their needs are, what they are looking for. And in fact, one thing which has come categorically clear and now that we are launching different other programmes outside of MBA, we are launching BCA, we are launching BBA.

One thing which has come categorically clear is that they are looking for students who have good aptitude and problem solving skills. And secondly, they are decently good on the communication side of things. And thirdly, which a lot of corporate say is one of the most important things is that the student needs to have the right attitude to work in a corporation. At the entry level these are the three skills. And surprisingly, for us, these are the three skills even the companies which are recruiting them for the tech positions also have laid out only three things. None of the companies so far have told me that if I’m hiring anybody at the fresher level, even for a tech role, I’m hoping that he should have a knowledge of how to, like write a good code or something. It’s the only three things: problem solving, communication and the right attitude.

Amit Somani 24:40

That’s fascinating, actually. I mean, it’s literally saying, Look, if you have the raw skills, don’t worry about it, we will take care of it. And it’s a pity and maybe that’s a good segue into NEP, I mean, how is policy and public policy, government policy and mindset, where is that at and how is that helping with respect to both education in general en mass and then particularly with edtechs, any thoughts on that?

Ashish Munjal 25:10

So one thing which has actually been very encouraging is the way this government is coming out with a lot of policies which are actually supporting a sort of skill based learning. And now Piyush and I, we represent Sunstone. In a lot of these forums, we recently partnered to come out with India’s skills report as well. And as a part of that process, we have interacted not only with corporations, we’ve interacted with a lot of government bodies as well, whether it’s the skills ministry, or ASSOCHAM, CII. So one thing which has been categorically clear, within the government is well, they also want to, obviously the government can’t just do a breakneck kind of thing. They can’t just immediately move away but they have been gradually trying to move away from a lot of academic things and move into more skill based kinds of things.

So whether we look at NEP or the other initiatives that government is taking, so even in NEP, we have seen that government is trying to break the degree which, if you do four years, you get a, let’s say, a degree, if you do two years, you will get a diploma. If you do one year, you can get a certificate. And you can come back any time and continue after that. So let’s say if I enrolled myself in a three year programme, I only did two year I will get a diploma, and I can maybe start working. And maybe after two years, I can come back, I can do one more year, and I can get my degree. So these are one of the very interesting ways the government has started to look at the education space.

One more thing, which is very, very interesting is that and that’s something that we have been propagating for a very long time, that the full time education, the formal education, the full time education should evolve more into a hybrid form of learning. Because in the current context, and current times, you cannot completely ignore online learning. And there are a lot of benefits that online learning also brings. So it’s the hybrid nature of education, which is a mix of both offline and online should evolve, the full time programme should evolve into more hybrid kind of a programme. And that’s what the government in the last two years has come up with a lot of notifications where now, as a part of the full time programme, 40% of the learning or the teaching can happen online as well.

So that by the time the student gets on this 40% of the tenure, he can do a lot of projects, he can do a lot of internships, he can start working with a corporation simultaneously, he can complete his 40% of the credits. So this is a welcome change from like from the whole industry, per se that government has brought in

Amit Somani 27:49

Ashish you said several things I want to double click on. One is the move from academics to skill orientation. Earlier you said even the corporates are more interested in fundamental problem solving skills, communication skills, attitude, aptitude, and so forth. Have the students also internalized this and the parents who of course, in the Indian context play a big role or are they still like No, no, just go to a classic thing and get a degree even if they’re teaching you about VAT versus GST? So where is the mindset, have people made that transition that, hey, look, all I need are skills and the right attitude, it doesn’t matter whether I have a formal degree or not.

Ashish Munjal 28:27

So that’s actually something which will take some degree of telling students onboarding the parents, because in our country, the degree hangover has always been there. So that’s where I applaud the government’s effort. What they’re trying to do is that in a manner similar to our existence, sunstone existence as well, they’re trying to plug a lot of skill based metric, skill based courses in the mainstream degree itself. So that’s the good part. And recently, we were interacting with somebody in the skills ministry, and they are saying the government is now coming up with a, like a stack, which is not like Aadhaar kind of a stack, but more of a stack, wherein every student’s skills will be tagged.

So let’s say if I am good at problem solving, that will be tagged there, rather than my marks in the marketing subject. So that’s the good part. Let’s say, if I am good at problem solving skills, I’m good at communication, those skills will be tagged. So you can actually work on these skills and from the corporate, we know what are the skills a corporate would need. So gradually, we should move away from the more academic side of things. Okay, what are my accounting marks or economic marks that were there in the fourth trimester I topped in accounting to let’s say I am at level four in problem solving in the overall metrics.

Amit Somani 29:54

Yeah, that is so heartening to hear and also the breaking down, like you said, of diplomas versus certificates versus degrees and having this notion of continuing education. So even if you got a degree, which, maybe accounted for something, but you don’t have the skills, you can still go and get it somewhere. So I think that is fantastic. Any other thoughts Ashish, if you were to start a company today? Or if there are other entrepreneurs tuning in and listening to this, where are some of the interesting larger problems to solve? Where are some of the other big challenges or opportunities that you see are sort of underserved as you look at it?

Ashish Munjal 30:32

So obviously, this is something which is sort of a fun conversation between Piyush and I. Once you are in something then suddenly a lot of opportunities open up now I can see okay, there are a lot of opportunities that surround the nursing side of things. There are a lot of adjoining opportunities on the pharma side of things. And there are a lot of opportunities which you can create in a more consumer first phenomenon as well. All of us know that there is a big dearth of good tech talent in the country. And the good part is that there are multiple interesting ways of solving these problems. And I am a big fan of GTM, personally. So there are a lot of interesting ways of doing your go to market in this market, because, and this is something that because I have been there in the startup ecosystem from now eight, nine years.

So, suddenly in the last two, three years, and this is maybe a geo phenomenon or something, but we are seeing a huge depth in the Indian markets now. So that’s the good thing that you can do, earlier what used to be is thinking whether there’s, if I do this, well, whether I hit the head too soon or not. So those kinds of problems don’t exist, at least now. You can go very, very deep in one of the two segments that you pick up. And obviously, once you are very deep, then you can start expanding into multiple other segments as well.

Amit Somani 31:56

Great, Ashish, as we wrap up, one final question, how have you changed personally, not just the companies and the business and the TAM and all that? What have you learned about yourself? What have you and what do you do to sort of stay abreast and keep up leveling yourself?

Ashish Munjal 32:12

Absolutely. So one thing which I would say, I have been lucky enough, from very, very early days of my college is that I always picked up this habit of reading. And I personally believe that, if you are a good reader, then obviously you can continuously keep, I would say, upskilling may not be the right word, but you can continuously keep upscaling yourself, because you learn a lot from other people, what are their experiences and everything, and that’s where, if you can, let’s say start a book of 300 pages, finish it in one day, that’s something that’s I would say it’s a asset, it’s a good thing that you’re born, whether you’re picked up. So that way, I would say, with Sunstone, I have learned a lot of things I have at least I’d like to believe that I’ve become much more calmer and patient as a person because whenever I meet people from let’s say, Crownit, they also tell me that okay, now you look much more calm, you look much more settled. And maybe it’s the age, at that point, I was brimming with energy always. And we have people in the company now who can do that, and who do that.

One is that and secondly, obviously, between, let’s say, how to give a lot of space to your other partners, how to work with them. That’s something personally that I have actually been working on a lot from the last two, three years. And definitely, in the education space, if you are building a company, which you believe that it’s a generational company, it will go a very, very long way. Then you have to establish yourself, that you, your voice, your thoughts should be established in the industry, as well. So personally, as an entrepreneur, I always believe that it’s always a journey. And you always keep learning, you always keep making mistakes. But yeah, it’s a long, long road for all of us.

Amit Somani 33:14

Awesome Ashish, thank you so much for being on the Prime Venture Partners podcast. I think we could go on and on but really appreciate you spending the time.

Ashish Munjal 33:24

Thank you so much. It’s really a pleasure.

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