Daybreak - There's more to Unacademy's U-turn than what meets the eye

Episode Date: September 3, 2023

Last month, Unacademy did something very unsusal. It introduced a new policy, restricting how much its educators can engage online. Ever since, Unacademy has either suspended or sent show cause notices to at least 50-60 of its teachers.But Unacademy relied on its teachers to bring in students. It wanted them to be popular so it encouraged its teachers to work on methods to hack social media. It made them its sales force.What made it make this U-turn and restrict the personal social media accounts of teachers? Many think the Karan Sangwan incident must've something to do with it but there is much more to it than what meets the eye.Tune in.RecommendationUnacademy stifles tutors after giving them free reinDaybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Ramon Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production.

Sita and I are still reeling from the intensity of our first studio recording. Intermission launches on March 23rd. To get alert, as soon as we release our first video. episode, please follow intermission on Spotify and Apple Podcast or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. Last month, the Atech giant Anacadam did something that was quite out of character. It introduced a new policy restricting to quite an extent to be honest how much its educators could engage online.

Now, if you know anything about Unacademy, it is probably this. Unacademy relied on its teachers to bring in students. It wanted them to be popular. It wanted them to be social media stars. And that is what made it different from other ed techs. Other ed tech biggies in offline coaching in the test prep segment built a business by producing students who held high ranks. Unacademy came along and disrupted that model by making its tutors the start.

If you listen to Daybreak regularly, then you'll remember in the last Unacademy episode I told you about the other side of things, how making teachers its sales force kind of backfired on the attack. So what made Unacademy make this U-turn? The most obvious answer is the current Sang-Wan episode. Song-Wan was an Un-academy tutor who got fired after he criticized the three new criminal code bills in one of his classes and urged students to vote for educated people. But hey, this is not the first time that a tutor has said something that has caused a reaction like this, which is why many educators believe that there is more to this than what meets the eye. Welcome to Daybreak, a business podcast from the Ken. I'm your host,

Nickda Sharma, and I don't chase the news cycle. Instead, thrice a week on Mondays, Wednesdays and Fridays, I will come to you with one business story that is worth understanding and worth your time. Today is Monday, the 4th of September. The new policy came into force sometime in mid-August, an academy has either suspended or sent show-cause notices to at least 50 to 60 of its teachers. The new rules restrain the tutors from posting content on their personal social media channels or even starting new channels. The policy applies to all educators.

According to these rules, the tutors cannot post any content, academic or non-academic, on any of their personal distribution. channels or start a new channel on platforms like YouTube, Telegram, Threads, Facebook and X. Now, this is hugely different to when last year, an academy came up with a new policy that had restricted educators from sharing any academic content on their personal channels. Teachers who spoke to my colleague Alifia Khan claimed that because of this new policy, star tutors like Avad Oja, who is also vice president and Gajendra Porohit with 1.2 2 million YouTube subscribers have resigned.

While Unacademy has not really made any public statement explaining the motive behind this move, people are putting two and two together and thinking that it is probably because of the Sang-1 incident. But a former unacademy teacher who spoke to the Ken asked a very valid question. They said, and I'm quoting, it is not the first time that an educator has said something political, so why are they taking such a drastic step now? End quote. After the Sang-1 episode, an old video also began doing the rounds

in which an unacademy teacher had made derogatory remarks against the tribal community. An educator also told us how in 2020, another tutor got into trouble. He was referring to the government in power, asking them to take care of students, or else the students would be forced to put down their pens and take up arms. Even he was terminated, but Unacademy did not come up with any policy change then? At first glance, it does seem like the ed tech company, which was lost valued at over $3 billion in March 2022, could be protecting itself against future liabilities. But educators think that there is more to this story. So what is going on? Stay tuned.

Let us take the case of Abinash Sharma, a former star teacher at Anacademy who was in the government test prep segment. Sharma found backing from a rival EdTech class plus to start his own company called Abhunei Maths. At Anacademy, Sharma is said to have drawn a salary of close to 70 to 80 lakh rupees per month and contributed over 40 to 50% of the business in his category. Just like Sharma, a bunch of other top educators like Arpe Chaudhry, Pavand Rao and Ankid Goyle left the attack in around the last six months to start their own ventures. Rao has launched an app called Mother's Life. Chaudhury came up with the SSB Guide Defence Academy a few months ago.

Goyle had joined Anacademy as an assistant vice president and a top educator in the gate category after Creatrix, the startup that he had co-founded was acquired by Unacademy. He left the platform three months ago and has started exam dost along the lines of Creatrics. And then there are other tutors who haven't really left yet, but they are keeping their options open. A former top educator who used to lead a category vertical at Unacadictory. told the Ken, and I'm quoting, in a way I can understand it because there have been tutors

who had no presence before they joined Unacademy. They grew their following and are now blackmailing the company by renegotiating salaries or threatening to leave. But you can't punish everyone for it. Most importantly, this will hurt the business of Unacademy itself and I don't mean by just exits. End quote. Right now, Unacademy is seeing an unusually high number of tutors

quit the platform. In a YouTube video uploaded after he was removed, Anshula Garval, who used to work in the CA section or the chartered accountancy section, mentioned that the number of tutors in the chartered accountancy category of Unacademy went down from 27 to 10 at one point. Stay tuned for more on this. It was in 2020 when Unacademy started giving a team referral code to teachers who were working on particular channels. This worked so well that a year later, the management came up with individual referral codes for the educators. But this system of referral codes led to competition within the teams in Unacademy. And to add to that, the ad tech company began ranking its teachers on the basis of watch time and number of subscribers. But that is a

different story. This system, despite how it was putting teachers under too much pressure to sell, was kind of still working favorably for the air tech. But this new policy, is obviously going to change that system. A former tutor told a Ken and I'm quoting, if you kill the distribution network, how will you get the referrals? This policy is a suicidal move. You cannot have the best of both worlds.

End quote. In his podcast interview, even Gorov Manjal, the co-founder had spoken about an academy's incentive structure, where he said that if a teacher made a lot of revenue, so did his company. This new policy will most likely

make that incentive structure ineffective. And obviously, an academy will suffer if the teachers can no longer drive students to the platform. Daybreak is produced from the newsroom of the Ken, India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings. A full subscription unlocks daily long-form feature stories, newsletters, subscriber-only apps, and podcast extras. Head to the ken.com and click on the red subscribe button on the top of the website.

I am Snigda Sharma, your host and today's episode was edited by my colleague Rajiv Sien.