Gaurav Munjal Shares Learnings from Byju’s Downfall

Gaurav Munjal, founder of Unacademy, in a series of posts on X has offered critical perspectives on why he believes Byju Raveendran’s edtech company, Byju’s is suffering setbacks in its journey. Byju’s has been in the news lately for all the wrong reasons. Recently, a research note from HSBC highlighted that the $22 billion valuation of the Indian edtech company has suddenly dropped to nothing.

Also read: From Billion Dollar Valuation to Zero? The Shocking Story of Byju’s Downfall

Munjal stated that Byju failed because he didn’t listen to anyone, elevated himself, and stopped taking feedback. “Byju failed because he didn’t listen to anyone. He put himself on a pedestal and stopped listening. Don’t do that. Never do that. Don’t listen to everyone but have people who can give you blunt feedback. You might not always like the feedback, but take the feedback and act on it,” said Munjal in a post.

Munjal was direct in his assessment of Byju’s downfall, attributing it to several pivotal missteps. “Understanding the Unit Economics on Day One is probably the best thing you can do,” Munjal emphasized, underscoring the importance of financial clarity from the outset of any venture. He elaborated, “Some investors are assets, some are liabilities. The trick is to figure out the ones who are assets and listen to them.” The NCLT ordered Byju’s on 27 February to only assign shares to investors taking part in the rights issue once its authorised share capital had been increased. The company was also requested to hold the rights issue funds in an escrow account to safeguard investors’ rights.

Also read: NCLT Blocks Byju’s Share Sale – Investors Demand Answers

Furthermore, Munjal stressed the importance of customer-centricity and adaptability in business strategies. “Don’t have any biases,” he urged. “What matters is what your customers want.” Munjal also went on to highligh the significance of resilience, transparency, and continuous innovation. “When times are tough, increase transparency by 10x with your investors and team members,” he advised. This transparency, he believes, fosters trust and collective problem-solving during challenging periods. 

“Some of your Best Ideas will come when your back is against the wall. Anybody can scale things without constraints. Winning matters more when it’s with constraints. It’s more sustainable this way,” he asserted, challenging conventional notions about competitive advantage in technology-driven sectors. Munjal stated that all 2021 valuations were bloated and that the current situation is the reality, not a market correction.

Gaurav Munjal States Learnings from Byju’s Episode

Munjal also suggested the following learnings on the importance of business model innovation over product innovation, the best distribution winning over the best product, and the significance of experimentation and figuring out leverage points to make companies successful:

• Take feedback and act on it whether its pleasant or not.
• Build a company that customers want be it online or offline irrespective of what founders want.
• An offline play is must for products being built in India.
• Transparency is a must when it comes to difficult decisions.
• Business model innovation is more important than product innovation.
• A strong distribution network is mandatory.
• Experimentation and research and development is extremely important.
• Identify leverage points, and avoid blind execution. 
• Most of the mistakes have already been done before. Find the people who have gone through a similar journey and learn from them.
• Winning is not always important, and survival is more pertinent.
• Learn from how best Indian companies scaled and succeeded as opposed to western companies.

He also suggested that winning will matter more when there are constraints, and that companies must “never give up”.