How Physics Wallah became the only profitable ed-tech unicorn startup?

Physics Wallah generated INR 350 Cr in FY22 with a profit of over INR ~7 Cr in FY21. Now they've raised $100M at a valuation of $1.1 billion dollars. Let's understand how they achieved this feat!

23rd June 2022
5 min read

In a nutshell

Physics Wallah started as a simple YouTube channel back in 2014. But, the creator of Physics Wallah, Alakh Pandey, had a long experience in teaching students Physics. In fact, after he quit engineering college in his 3rd year he moved to work as a Physics teacher in an offline JEE coaching centre.

But, although Alakh was earning well, the scope for growth was very limited. So, Alakh in 2014 started the YouTube channel. For the first few years, the channel got no traction. And, things were slow, to say the least.

But, in 2017, Alakh decided to take this more seriously. He quit his day job and started teaching Physics to niche group for ICSE students. The strategy of targeting a niche group worked and they lifted Physics Wallah to 10k and then 50K subscribers in a couple of years.

That’s a far cry from their initial strategy of offering students a Rs 50 recharge to subscribe to the YouTube channel 😂
But, overall, there are 2 things that worked for Physics Wallah
1) Incredible storytelling
2) Adding value to the community

Physics Wallah's audience base is a meme loving group that's intensely supportive of Alakh Pandey. Any conflict and the group is ready to take on the enemy with digital pitchforks and knives.
Seeing this result, it's clear that Alakh's initial obsession with his students massively paid off.
We learn 2 things here:
1) Buildd your community or audience, before building your product.
2) The best marketing for your startup is done by your customers

In 2020, this community pushed Physics Wallah to create a proper app that literally crashed on the first day of its launch. It reached 300K download in just 7 days and now has more than 5M downloads in 2 years.

Today, the various courses generate INR 350Cr in revenue. This is almost comparable to Unacademy’s INR 380 C in FY21. But, thanks to its loyal community of students it doesn't have to spend Unacademy's INR 414 CR on marketing 😉

It's quite funny how both these startups started out as YouTube channels but eventually took very different routes! But, now with the infusion of $100M VC funding and a larger team, it's no more just Alakh and his students.

Will the charm of Physics Wallah continue to dazzle if Alakh is not the one teaching on the screen? Only time will tell!


Notion and Canva were huge game-changers.

They took a problem we all face & created a simple affordable solution. One day, we know nothing about them & the next day everyone can't stop talking about them!

They rode on high horses on the back of a community. A community that loved them.

Today's tale talks about a similar community-led ed-tech startup. One with a superstar protagonist, a thrilling story and a brilliant business.

Of course, I am talking about Physics Wallah. After only 2 years since its launch, Physics Wallah generated INR 350 Cr in revenue in FY22 & earned the unicorn status. And this unicorn has a PROFITABLE horn! 🦄

So, let's learn through Physics Wallah why you shouldn't just "launch" your startup, but buildd a community.

The story of young Alakh Pandey

Alakh Pandey, the creator of Physics Wallah originates from a middle-class family in a small town called Prayagraj in India.

Alakh didn't come from a strong financial background. With his father's unfortunate failed ventures, it was on Alakh to buildd a bright future for their family. They took out a huge loan to fund his schooling, and he was set on a path to good grades and a good job.

To help out his father, Alakh started teaching Physics (his favourite subject) tuitions right from 8th grade and continued doing so in 11th and 12th grade.

Like many 12th-grade aspirants in the country, Alakh also dreamed of studying at an IIT one day. But, unfortunately, his dream didn't come true.

He instead enrolled in a local engineering college to study Mechanical engineering, since that subject was "closest" to Physics.

College was not everything Alakh had hoped it would be. The first year went by in a breeze. But, after a couple of years, he realised that he was not learning anything valuable.

Pretty much determined to buildd his future, Alakh decided to drop out of college in his 3rd year of engineering.

Offline coaching teacher to a YouTube GURU!

As a dropout, Alakh turned to one thing he always loved — Teaching.

He started teaching Physics at a local JEE coaching class. And, for the first time, things were going great. Alakh was earning enough to support his family. He had a good job that he actually enjoyed doing.

His boss was also impressed by his performance & he assured Alakh that if he kept going like this, he'll soon be able to teach over 7000 students[1].

That's when reality hit him. Alakh's goal always was to have a huge impact, to do something BIG. That's the reason why he had dropped out.

He realised that teaching at local coaching won't allow him to have that impact. So, he started his own YouTube channel in 2014.

Marketing 101 - building a community!

For the first few years on YouTube, things didn't click for Alakh. He tried many hacky ways, like offering students a Rs 50 recharge to subscribe to his YouTube channel 😂

But well, as you might have guessed, it didn't work.[2]

Lesson ➝ As a startup founder "Shamelessness" is a super important skill. In fact, early on, it can be a BIG superpower.

So, he made two changes in 2017:

  1. He quit his job to focus on YouTube full time
  2. He ditched the crowded JEE/NEET space, to teach physics to ICSE students.

Now, these ICSE students were a neglected bunch. So, getting a caring teacher who taught them Physics in a fun way for free was everything! They lifted the Physics Wallah channel to 10K subscribers in a year but there was more to come.

Soon, the YouTube channel grew to 50K and with the pandemic boost, more than 7M subscribers!

Lessons ➝ Your startup doesn't need to fail fast. It can succeed slow. All startups seem like failures till they become an overnight success.

So, what worked for Physics Wallah here?

1) Move through storytelling

A lesser-known fact about Alakh is that his first love was not Physics or teaching but acting!

He loved story-telling. So, he combined it in everything - Physics, Teaching & Marketing.

Alakh is a master storyteller, so much so, that his storytelling not only made his classes super interesting but also give him an influencer/guru status. He was not just a simple YouTuber but a close teacher to these students.

With his personal stories that were both motivational & impactful and with a sprinkle of wit, Alakh created a community of die-heart fans in his students.

2) Adding value to your community

For the first few years, the goal was to solely add value. Physics Wallah was not selling any courses or running brand deals or ads. In fact, Alakh didn't even know that he could monetize his YouTube channel.

It was about pure content that was most helpful to his students. And, the communication worked both ways. Alakh didn't just teach but also listened.

  1. His students asked him to write content on the board while teaching instead of just pointing at already written content. He took the advice.
  2. They told him to cover a particular topic in a certain way and he would deliver.

This feedback loop created a one-on-one conversation between Alakh and his students, creating a loyal audience.

Physics Wallah's audience base is a meme loving group that's intensely supportive of Alakh Pandey. Any conflict and the group is ready to take on the enemy with digital pitchforks and knives.

Seeing this result, it's clear that Alakh's initial obsession with his students massively paid off.

We learn 2 things here:

  1. Buildd your community or audience, before building your product.
  2. The best marketing for your startup is done by your customers.

The birth of Physics Wallah ed-tech app

In 2020, when the COVID 19 pandemic hit, it was this community that pushed Alakh to launch his ed-tech app called PW - short for Physics Wallah.

On the day of its launch, the app literally crashed with the sheer number of downloads. Within just 7 days, it reached 300K downloads![3]

Today the application has over 5M downloads, 3 lakh daily active users, & over 90 minutes of consumption time.

From the early days of the one-man army, now Physics Wallah has grown to a company of 50 lecturers, 250 faculty members and 7M subscribers[4]!

All this by selling courses at 1/10th of the market price.

0 to 7M - another way of building an ed-tech startup

Back in the day, Physics Wallah had earned Rs 8000 in the month they finally monetized their YouTube channel.

It was YouTube monetization that sustained Physics Wallah in its initial days and helped Alakh continue churning content without worrying about his living.

Lesson ➝ The first revenue goal of your startup is not a million dollars - but to earn enough to NOT quit.

Today, their various courses generate[5]

  • INR 350 Cr in revenue in FY22, set to increase to INR 650 Cr in FY23
  • INR 7 Cr in profit in FY21, making it the only profitable ed-tech unicorn in India!

Compare this with Unacademy's INR 380 Cr revenue in FY21 (latest numbers), the 2-year-old startup is now playing in the big leagues! But, thanks to its loyal community of students it doesn't have to spend Unacademy's INR 414 CR on marketing 😉

It's quite funny how both these startups started out as YouTube channels but eventually took very different routes!

But, now with the infusion of $100M VC funding and a larger team, it's no more just Alakh and his students.

Will the charm of Physics Wallah continue to dazzle if Alakh is not the one teaching on the screen? And, with VC money in the scene and higher expectations on PW's shoulders can they continue selling courses for just a fraction of the price?

From the billion-dollar mark, things certainly get more challenging. So, it'll be interesting to see if Physics Wallah follows suit of other ed-techs or manages to buildd a profitable empire!

References:

[1] — How did PHYSICS WALLAH become a 1.1 Billion Dollar Edtech Brand?

[2] — Alakh Pandey Interview on a YouTube channel

[3] — How Alakh Pandey mined his passion for teaching to build edtech unicorn PhysicsWallah

[4] — Physics Wallah’s bootstrapped challenge to Unacademy’s test-prep prowess - The Ken

0

Read the entire article to get 100 buildd points Sign in to gain points

Tag wise split:

    Stage 100

  • Idea Validation 10
  • Early stage 30
  • Growth 30
  • Mature 30

  • Topic 100

  • Marketing 20
  • Product 20
  • MVP 20
  • Founders 20
  • Funding 20

  • Content Type 100

  • Learning 20
  • Startup Analysis 70
  • Staying Updated 10

Comments

You'll love these articles too!

How two IITB grads scaled BrowserStack to $4B valuation & $200M revenue!
How two IITB grads scaled BrowserStack to $4B valuation & $200M revenue!
How did No-code platform Webflow go from bankruptcy to a $4B valuation on their 4th try?
How did No-code platform Webflow go from bankruptcy to a $4B valuation on their 4th try?
Elon Musk buys 9.2% of Twitter stake for free speech!?
Elon Musk buys 9.2% of Twitter stake for free speech!?

How did No-code platform Webflow go from bankruptcy to a $4B valuation on their 4th try?

Webflow is a wildly popular NoCode tool!
But its CEO, Vlad Magdalin:
- failed 3 times
- had $60,000 debt
- no income for 6 months + nearly got bankrupt
On his 4th try, he built his startup into a $4B company!

Bit of Backstory:
Webflow founders Vlad and Sergie Magdalin are both refugees from Russia. They came to the US during the Soviet Union's collapse. They didn't know any English & their parents didn't have any real marketable skills. So, from the beginning, they had to learn to survive and eventually buildd a good life.

The NoCode Vision:
When the brothers were in high school, they started freelancing. Sergie would design websites and Vlad would convert them into executable code. Now, Sergie loved designing but Vlad found coding to be repetitive.
So, he thought to himself how great it would be if Sergie could buildd a website all on his own without needing a developer.

Early days of unrealistic optimism:
Vlad tried and failed to buildd Webflow 3 times in 2005, 2007, and 2008!

He then took up a stable job at Intuit & started working on Webflow as a side project. But, he soon realized that going in full-time was the only way to become successful.

His brother Sergie and colleague Bryant Chou joined him. But, at that time Vlad was sitting on 3 months of income. So they were desperate for funding. And, their only hope was getting into YC!

After failing once, they finally got into YC the second time! Good nice after 8 years of trying!

After raising a small round of funding, they decided to bootstrap the company to profitability and only later take funding to scale further!

In 2019, they raised $72M, followed by another $140M in 2021 and $120M in 2022. Today, Webflow is worth $4B & generates revenue of $100M!

Elon Musk buys 9.2% of Twitter stake for free speech!?

On March 25th, Elon Musk polled his 80M followers asking them if they "believe Twitter rigorously adheres to the principle of free speech".

The results were resoundingly clear — 70% of the over 2M votes said "No".

The next day, Musk followed this up with another tweet almost hinting that he might consider buildd-ing a new Twitter-like platform. But, the entire narrative quickly took a 180!

In a span of just 10-days, Musk went from criticizing Twitter to becoming its largest shareholder. Naturally, this raised a lot of eyebrows, with some suggesting that the poll was likely a gimmick to drive down Twitter share values so Musk can get a better deal.

But, here's an important fact — Musk had actually bought these shares back on 14th March.

So, either he thinks Twitter makes for a good investment or he has big plans for the company. Now, we know Musk is not an "investor" type billionaire, so option one doesn't entirely makes sense.

As, for the option 2, Musk only owns a passive Twitter stake, which means he has no control over running the company. But, many analysts speculate that this might change very quickly.

Now, yesterday, Parag Agarwal announced that Elon Musk is appointed on Twitter's board so all the theories about what might change will possibly come true. But, only time will tell how things pan out!