EXPLORICA

E-CELL, IIM Trichy

Presents

ROUND 2 of

EXPLORICA 3.0
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Background

Rachit, a veteran serial entrepreneur and a recent angel investor, was no stranger to the
innumerous obstacles that start-ups have to navigate through as a part of their tumultuous
journey. And yet, as he entered into a crucial strategy meeting with his founding team, he
felt the rush all over again: a mix of euphoric optimism and anxious uncertainty.

His latest venture, an online learning platform (OLP), was on a rocket-ship growth path. It
had posted 3x quarter-on-quarter revenue growth. This became possible owing to their
breakout success– online Chess lessons by a reputed Grand Master. The ‘watershed
moment’ dilemma facing the founding team was: should they go all out and focus on Chess,
which is a huge global opportunity in itself or should they take a step back and evaluate
other trajectories?

The Journey

After exiting from the founding team of a hugely popular hotel-booking portal in 2014,
Rachit found himself at a crossroad in his entrepreneurial journey. He came from family of
educationalists, and harbored a deep interest to solve the perceptible knowledge gap in
India by harnessing the power of technology & internet. To understand this need-gap
further, he embarked on a journey to gain a deep understanding of what the youngsters in
India wanted to learn and what prevented them from doing so.

His two year journey led him to interact with tens of thousands of kids across India; ranging
from high-end International Board (IB) schools to classes held in makeshift sheds. The
feedback received was unequivocally uniform though. All the kids had pent up aspirations
and aspired to learn things beyond the conventional learning paths normally presented
across to them.

During this journey, he met Akashin 2014-15, who echoed his vision of broadening the
knowledge horizon of school children. Akash’s excellent network with school administrators
helped the OLP conduct sessions across geographies. Both Rachit and Akash leveraged their
professional network to onboard mentors for sessions with the school kids, with topics
ranging from sports to machine learning.

Abhinav, Rachit’s junior from college, was a prodigious techie who had built a learning
management product while working in his previous firm. He came on board as the CTO in
2015-16. The fourth core member Sandeep joined in 2017.He was another junior of Rachit,
and had an extensive experience in coaching and also shared the passion of teaching kids.
The addition of Abhinav and Sandeep boosted the growth of the OLP, and turned out to be
an inflection point in the young venture’s journey.

Finding a sweet spot with Chess

The extensive feedback received from thousands of school kids gave the OLP team an
unparalleled insight into the minds of the aspirational youngsters. Based on the insights
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gleaned from these extensive interactions, the OLP team set about creating a new type of
mentoring and online learning platform.

The OLP team reached out to mentors, who showed a keen interest in the idea. Out of all
the mentors, a reputed Chess Grand Master, was the most passionate and immediately took
to the idea. Chess seemed like a perfect fit for the platform; the lessons could be
administered online along with live training games, providing a unique 360o experience for
the student.

The team quickly put together a teaser video and started marketing at offline Chess events.
To their pleasant surprise, they witnessed extraordinary positive response at Calcutta Chess
Open which led to excellent pre-launch buzz. The marketing team also reached out to
influencers whose endorsements in the form of tweets and blogs led to significant pre-
registrations.

In total, even before the platform went live on June 6, 2018, pre-registration revenue in the
order of tens of lakhs had been generated!

The OLP team size also exploded in this duration from January 2018 to June 2018. People
were hired across mainly two roles: tech and ‘floaters’ (who were smart, driven generalists
and could do operations, sales, marketing, CRM etc.) From just the founders a year ago, it
rocketed to 60 members.

Given the breakout success of Chess, Rachit’s team quickly figured out new services and
products (e.g. pre-recorded video subscription, one on one coaching session, webinar etc.)
to capture a wider user-base. The outreach was also extended to capture users across
strong Chess cultures, such as South-East Asia and Eastern Europe. Local chess GM’s in
these regions were on-boarded to cater to increasing demand.

The Dilemma

Given the success of Chess in a short span, and the break-neck speed of execution, the
founders had little time to reflect and plan out the future course.

On one hand, Chess itself was a multibillion dollar opportunity globally and they had already
started making inroads into the global market. They had a focused, driven team and the
best mentors specializing in Chess. They had figured the nuances and the scale seemed
inevitable. Accomplished mentors across the globe were signing up on the platform and
through their endorsement on social media, customers were signing up from all across the
world. The time seemed just right to focus on this and target attaining unicorn status on
dint of this win.

On the other hand, their initial vision was to solve a much wider problem of addressing
learning gaps of aspirational school children; and opportunities similar to Chess were there
for the taking. It was not clear how easy or difficult the process of cracking open the other
sectors would be.

The current team, both external experts (Chess GM’s and coaches) and internal, was deeply
entrenched in Chess; capability and focus wise. To replicate the Chess story, a new vertical
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would have to be identified, relevant experts on-boarded and a team capability built around
it.

Rachit had also been exploring VC funding to help fuel the explosive growth. The initial
bunch of prospective investors he met were bullish on the idea, team and numbers; but had
their usual concerns around scaling up and growth just as VCs are known to have.

They not only had to convince themselves and arrive at a consensus, but also keep the team
constraints and the investor opinion in mind before making a final decision.

Case Question

If you had a seat on the board, which decision would have voted for, and why? Explain the
factors that you would consider, the relative importance of those factors in your decision as
also why those factors are important for OLP.