Whither "Canned Education"?

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Recently, Agrawal Classes closed shop. Begun in the late 1950s, it spawned several "toppers" in the Science stream, and its students who got admitted into the IITs over the decades would be large enough in number to fill several batches. The owners' family was no longer interested in running these successful classes, and, instead of cashing out by selling the not-inconsiderable brand value of that trade mark, which needed to be defended quite often from sound-alike me-too's, they chose to close down quietly. 


This made me ponder on the phenomenon of "classes" -- teaching shops that supplement the primary educational institutions, viz. schools and colleges and also help students prepare for hyper-competitive examinations like the IIT-JEE (which Jim Clark, co-founder of Netscape, called the most difficult examination in the world to pass) ; or examinations that are notoriously difficult to pass (like the CA Examination which has pass percentages in the low single-digits). 


Rather than dwell on the question of whether they are a good thing or not, a point that can be argued ad nauseam, I thought of looking at the phenomenon and the number of business models it has spawned. I had first-hand experience of Agrawal Classes myself as a student of Mathematics, and I knew then as I do now that it was geared towards super-achievers. Ordinarily good students like me often fell at the first hurdle, and it was all we could do to even score 35% marks in their internal tests - when there were some students (destined to be toppers) who rarely dipped below the 90% mark. Only students who had scored above a particular percentage in the qualifying examination merited admission, even if one was willing to pay the stiff fees. 


Over the years, coaching classes have flourished -- with many being obviously more successful than others. But like Agrawal Classes, they were largely brand extensions of a single "Sir". They have often been named accordingly. For example, one of the most successful of such classes, JK Shah Classes, run tightly by the eponymous  "JK Sir", now runs out of 10 locations in 2 cities. Mr. J K Shah still engages classes, and he now has several other teachers who teach the mind-bogglingly large number of students in multiple batches, more than the total enrolments of any single commerce college in Mumbai, even though he uses a fraction of the space available to any large commerce college in Mumbai. Each of the teachers (many of them being CAs)  works really hard. 10 hours a day stand-up teaching is not uncommon. Each earns as much in two or three days than what a salaried CA with equivalent years of experience earns in a whole month working with a large company as a Finance Manager. J K Shah has run his business for over a quarter century with a sharp, single-minded focus: catering to coaching needs of CA-hopefuls. While he gets several opportunities or proposals to diversify, or to expand, he has kept things firmly in control -- all classes are owned by him; he has eschewed franchising or expansion into other domains (like teaching science). He personally selects and recruits teachers for his classes, and has very low attrition.  I had the good fortune of meeting him, and in a longish conversation I had with him and one of his proteges, I learnt or observed all what I have written above. Thus, this model is nothing but a scaled up (by a single order of magnitude) model of Agrawal Classes, in a particular domain.  However, there is one difference: the energy level demanded of teachers in JK Shah Classes (they have to teach a single topic/ subject repeatedly at all 10 locations, which means significant commuting every day) is much higher than the average teacher in Agrawal Classes - some of whom had time and energy left for conducting their own private tuitions as well.  If a teacher falls ill or is on leave, this always poses significant pressure on scheduling; because the others have to work harder and somehow fill the gap. The one thing common in JK Shah Classes and Agrawal Classes was their total commitment and absolute seriousness with which they viewed time schedules -- rarely are there time overruns because the syllabus is not covered.  The one big difference is that Agrawal remained a class for toppers or topper-hopefuls; JK Shah Classes prides itself on teaching almost any eligible student it can manage within its classroom capacity. However, many classes offer significant discount for students scoring very high percentages, thus encouraging high-scoring students to join.  


Of late, a newer model has emerged -- that of a model of growth in breadth of offering and also geographical coverage, often through partnering and franchising; sometimes through distance education, and sometimes through acquisition. Some, like Brilliant Tutorials, have pioneered a distance education model for competitive exams, in  engineering, medicine, banking, management and the civil services. Contact programmes are held in 14 cities (according to its website) and Model Tests are conducted in 44 cities across India. 


Educomp Solutions has pioneered use of high technology to achieve scale and reach (14,500 schools; benefitting 7.9 million students) for the K-12 (School+High School+Junior College) that were hitherto thought unthinkable. According to its website, teachers in some 4,500 schools now enhance their teaching by dipping into the large proprietary digital "instructor-led" content library built up by the company, using teaching aids like 3D animation, films, etc provided by Educomp through "SmartClasses" set up by them in different schools. Towards the end of a typical  class, every teacher displays questions on a screen, and every child in class gets ready to answer the questions with their personal answering device. Students click the answers, and instantly, teachers can get a score sheet for every child in class. She ends the class going over the parts of the lesson that the scores show as not clearly understood by the class. The technology also involves interested parents more closely by making available to them information the school chooses to share with them digitally. Also, the system largely reduces the drudgery involved in manual paper corrections by teachers.


Mahesh Tutorials (a brand owned by MT Educare Ltd) is another such model. It is a coaching class in the Agrawal or JK Shah Classes mould, with a major difference: It is growing its depth and geographical reach far, far more that the earlier named and their ilk. It is growing not so much through technology (though it spends a lot of money and effort on developing tutorial content) but through partnering (and lately through franchising, but these are tiny steps). They basically "swallow" individual classes, and allow these teachers a great deal of freedom to run them under the name and style of Mahesh Tutorials, thus getting advantage of both, the brand name recognition and marketing clout of Mahesh Tutorials, but also the excellent back-end support facilities that are shared by all "MT" educational offerings, like tutorial content, classroom scheduling and management, student interaction management, etc.. Over the years, after beginning with coaching classes for Std IX and X only, now they have day-care for pre-schoolers, kindergarten, junior college classes for Science and Commerce, and CA (CPT, IPCC, Final) students. They have grown from a single location to over 180 locations, including Dubai and London. And they still boast of the regular crop of "rankers" in most of the courses they offer, belying fears that quality and results may suffer with horizontal and vertical growth. 


Many feel that coaching classes themselves (Educomp is not strictly in this category) tended to make students dependent on "spoon-feeding" and that if they are not discriminating about the students they admit (like Agrawal Classes was), their results are bound to cluster near the average result for the examination as a whole. However, since so many students (an overwhelming 95% of CA IPCC and Final Students, for example) think that coaching classes is a good idea, maybe they need a second look. Especially because so many different business models all seem to be flourishing, the difference being scale and geographical reach. Indeed, some are simply cash-rich; some others are profitable but their expansion plans make them cash gobblers (like MT Educare which, while being profitable, is growing so rapidly that it has needed private equity infusion, and is likely to go public soon). 


MT Educare hopes to cross the chasm between "coaching classes" and educational institutions by setting up a private University, like Sikkim-Manipal, Amity or Lovely.  This is a "crossover" model - where one removes the distinction between coaching class and teaching institution. 


Are there other variants/ business models in this space? Would like comments from persons in the know.
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How Schools in Denver were cheated by Bankers

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Here is another sordid story of bankers' greed -- where they sold sophisticated structured products to a School Board who lacked the expertise to assess the risks of such a product realistically -- while the bankers laughed all the way back to their offices!!
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Another Great Feature from Google Labs

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The guys at Google are really something.

Now, it is an app still in the Labs stage (i.e., pre-beta) that I noticed today. It is called Google Public Data explorer. What it does is that it brings Economics and Macro-economic indicators alive.Way, way beyond what any spreadsheet applications have done. This feature currently works on specific datasets that Google has compiled. I am sure that the next step will be to allow you to upload your own datasets and use the same engine to animate the stuff.
Take for example this picture.  It clearly shows how hypocritical the developed countries are, when they refuse to talk about sharp reduction in emissions, and expect countries like India and China to commit to emission reduction. See their per capita profligacy over the last few decades by clicking on button below the graph. The underlying data is from the World Bank.
Take this picture, that shows how the preparation for the Olympics and the huge increase in steel manufacturing in China made for a sudden acceleration of China's absolute CO2 emissions.
Macro-economics and statistics will never be the same again.
I salute Google. This would be a godsend for researchers and for number-crunchers in companies, once it graduates to allowing us to upload and analyse our own datasets. No more huge money to be spent on data mining and analysis software. 


PS: Those of you who read this and some of the other entries on my blog are invited to comment  on the entries they have a thought to share, and to subscribe to the blog feed. I promise interesting posts, and not too many of them. Nice to know that someone is reading all this!

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The Cost of Higher Education

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In the last 4 years, the tuition fees and other costs associated with institutions of higher learning have started shooting through the roof. For example, fees at IIM-Ahmedabad are now reportedly Rs.13.5 Lakhs for two years. I am not commenting about whether the fees charged today by IIM-A reflect the worth of the education or not (that is a separate point for another day). My intent here is to create consciousness of  the indirect, secondary impact of the fee-rise. The primary effect is on the students hoping to get or getting admission at IIM-A. The secondary effect affects the entire sector it operates in.

Fees charged by such iconic institutions are a little like the "Bank Rate" announced by the RBI: while nobody uses that as a benchmark, generally, fees charged by other institutions with lesser reputations tend to cluster around this figure, and use it as a justification. Some charge more (like the ISB) and most charge less, but not much less. Since the IIM-A has raised fees roughly three-fold (I stand to be corrected) in less than 5 years, institutions of much, much lesser repute (ranging from good, low profile institutions to fly-by-night operators with monstrous advertising budgets) have, in the same period, at least doubled their fees without in any way delivering anything substantially better to the student body. It would be fine if the earlier fees were so low that profitability was an issue. They never were. Higher education has become a business in which politicians have dabbled and entered in a big way. This itself is a sure sign  of how lucrative the business was. Now, they are rubbing their hands in glee: Along with a huge increase in the fees, there has most likely been a significant fall experienced in the cost of "managing the environment", what with the regulatore, the AICTE standing totally discredited today.

What's more, the other forces that could have drummed sense into this sector, like the raters, have themselves over the years, opened themselves to charges of being very pliable, though some of them are in all probability pillars of rectitude. Besides, in any case, rating methodology is itself open to question, with its predominant reliance on physical indicators like infrastructure, which is very easy to create and set up in sectors like Management Education -- no equipment, hospitals or labs are needed. Also,.many institutions have learnt many tricks to "game" these ratings. As a result, there is no way for the lay person to figure out which rater is the most honest, or which institution is the best value for money, or even which institution is exceptionally good. B-Schools, especially, have become marketing institutions at two ends -- to attract applicants and students at one end, and to attract employers and push their students into lucrative jobs at the other (which is already becoming too difficult for most institutions to guarantee, so they talk of maximum and average packages, while downplaying the percentage of placement.

Every student must today conduct a RoI exercise for whether it is worth doing an MBA or not. An important element in this RoI calculation has to be opportunity cost -- what you would earn if you were not to do your MBA. The purpose of this exercise is to recognize clearly that for the below-average or average student, today, even doing an MBA from a 50th or 100th rank B-School in most ranking lists, or worse, an unranked B-School, it will never be worthwhile in financial terms. Once this clarity is achieved, one can take a decision about whether it is worth ding an MBA for all the non-financial reasons, like status, prestige, etc.
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Informed Critique of the Right to Education Act

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Here's an informed critique of the Right to Education Act. Anyone who wants to comment on it must read this. The author has obviously read all the fine print before writing this piece.

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