Unicorn an artificial thing, success of startups cannot be ascertained on basis of valuations, says Ronnie Screwvala

So, it's an entirely different approach to planning. Everyone's been caught being reactive and not being proactive.

When you're talking about life and death, it must happen by the minute. When you're talking about not losing your job, you can have one month or two months there.
Absolutely, it is an unprecedented situation. And unless there are people with good health, I don't think corporations can succeed.

Correct. I think, today what you're seeing is really that sense of compassion and empathy. At this time last year, I think organizations felt a sense of responsibility. Now that sense of responsibility has changed to a sense of empathy. Because it's so life threatening.

Do you see a decline in the number of layoffs happening this year compared to the previous year?

I think it's too early to judge what the impact will be, as we go forward. Right now, if we can stabilize our health situation, and focus on vaccination, it's just going to help us live a much saner, safer life.

People today are not taking full stock yet, in terms of the employment crumble. You had many sectors and businesses that went down, then for three, four months, from November to February, they saw an incredible surge.

And now they are back on the roller coaster ride. From airlines to restaurants to hospitality to automobiles, I mean, bike factories and Maruti saying, they want to shut down the factory, partly for health, because they don't think they can have so many people working together, safely. And then of course they know that orders are going to slow down. So, I think it's going to take the better part of the next quarter to figure out what the impact of this one is versus the last one is.

Let's talk about upGrad. There are multiple initiatives that have been taken by you, starting from Temporary Safe Workplace Bubbles. What exactly is this supposed to be and how is it going to help?

We felt a lot of people were living in paying guest accommodations, in buildings and housing colonies where they were getting exposed.

So, it was a question of how do we sanitize and bring them into a bubble? I think we've done that in sports very well, where there was a bubble (the IPL). I know this time it didn't work because I think we made the mistake of going to five cities instead of maybe just everyone buckling down in one city. But bubbles do work. And so, for us, it was not much that the productivity would carry on, which is definitely a corporate interest, but also, that everyone who was in a paying guest accommodation and didn't want to go back to their hometown, had that facility. It's worked very well for us in Bangalore and in Mumbai, right now.

How many people are in these bubbles?
About 150 between the two cities.

Despite that, many industries are not doing great this year, much unlike the previous year, when they are trying to give some incentive, some bonuses to keep the spirit of the employees alive. At upGrad too, the management has given increments, bonuses, promotions. Given the situation, how are these measures helping lift the spirits of the employees?
Well, I think increment and bonus should not be a handout. Everyone on a working level feels very proud of what they're doing.

The fact is we’re a digital company, and therefore we're moving forward, which is why we never cut down on people. We didn't do pay cuts. We had it for the first quarter, but we reinstated it retrospectively.

The question of increments should be for companies as they see their fortunes. It'd be wrong to say -- let's get an increment but I don't know whether in six months, I'll be in business or not. That's a silly move for anyone. So, it needs to be very balanced.

What are organizations doing to take care of the mental health of the employees during the current crisis, and how important that is?
Obviously, it's important, and I think this is where all of us as corporations are doing what best we can do. But let's be very clear; that real sense of positivity and comfort comes from closeness.

You need to have that personal touch. And I think organizations who have that personal touch are able to communicate. Like for example, even when we communicate on our COVID Health Group, it's a very crowded group. But I want to be in the group. My other co-founders, Mayank and everyone, want to be in the group and on the mails. I would say that at least 20 to 25 mails and a couple of WhatsApp and at least two, three calls that one does in a day with people about whether they're feeling well or not ... that closeness and comfort level is more needed today, than anything else.

How efficient is work from home?
Whoever got excited in the first few months last year about working from home for life, even the global organizations, are changing their minds. They are now saying this is a new way, and let's have a new balance.

I would say work from home is not inefficient. It is reasonably efficient. But that's what it is.

Companies are not built - scale and success are not achieved just by being efficient. You need much more than efficiency. You need personal touch. That is required for building relationships, businesses, partnerships, for interacting and ideation for creativity and substantially for innovation, which cannot happen if you're just staring into a screen.

You grow as you look at your peers, you grow as a competitive environment comes in. Work from home won't show you how competitive the environment is out there because you'll have a much more blinkered approach to things.

Given the current situation in the country, how much time will it take for people to actually get back to their offices?
That is going to be much more health and safety-driven than company HR-policy driven.  I mean, manufacturing, you have to get back to work. Some service industries, you need to get back to work.

This is going to be governed completely by how the world normalizes. It will change the frequency. You can work from home for three days and come to the office for three days or whatever else. Those permutations and combinations will happen.

You are also an investor. Tell us where India is headed with the minting of so many unicorns? In the first few months of this year, the country has seen more than 11 unicorns come into being.
I don't have the common view that most have on this. To me, the unicorn is like the clap, clap, clap emoji that you have on your phone. It's an artificial thing. That's how I look at a unicorn because what the hell does that mean, in any sense of the word? Yes, you got valued because five or seven investors feel that this is the best way that they want to come out there and invest.

Having said that, I think it is phenomenal that entrepreneurs are getting that josh (spirit), recognition and the funding. It makes up the dreams of other people. It makes people sound like oh, `I can also do this’.

And frankly, in India, while we say we are an entrepreneurial country, we still have a long way to go in terms of the number of people who are going to be entrepreneurs and create jobs for more than 100 people.

The real entrepreneurship is innovation, taking India to its fourth industrial revolution. It's about creating versus just being a cost arbitrage centre. And in that process creating jobs for a lot more people.

The ed-tech segment has seen a phenomenal boom in the last couple of years. At least two unicorns have been formed. Multiple leading investors have put money in companies like BYJU'S and Unacademy. Do you think upGrad is in a hyper funded market currently? What's the scope for the third largest player in terms of valuation?
We don't look at it as hyper funding. I think if the businesses were benchmarked only on the basis of funding, the whole world would turn topsy turvy. We built upGrad over the last five years to a very scalable business level with less than $25 million. To me, I think there is much more grounding and a phenomenal base in the foundation for a company.

Number two, I think funding comes on the liability side of the balance sheet, never on the asset side. It's a very onerous capital that requires its own return; it forces you to work from a shareholder return capacity point of view. Even if you want to take a longer-term view, you may have to take some mid-term and short-term views.

And thirdly, I'm a firm believer that it's always about the finishing post. It's more about five years later. If I raised the maximum funding, and somebody told me that I was the number one company, I'd say, wait a minute, that's not the benchmark for me.

Let me rephrase the question and ask you as to what is your vision for upGrad? How to see the ed-tech market evolving in the next one year and what plans does the company have?
So, we have a three-year, five- year and 10-year plan. Basically, right now, our focus is higher education, which is everything above K12. That's where a massive amount of disruption is happening. And we believe that right now, this is a three times larger segment than even the K12.

The main point is there's an entire market of working professionals; one-third of the people take their graduation degree, two-thirds don't even do that. Now you've got an opportunity. Two-thirds of the people can go out there and do degrees. Every working professional will have to upgrade themselves and learn something more, go back to college, at least three to four times in their life.

If you look at that size of the market, not just in India, but around the world, it is massive. And it's only going to get disrupted from digital and online. It's not going to get done because 100 more universities are going to come up, because faculty is always going to be a problem. So, you get the best of faculty, you have phenomenal technology, you have a deep learning experience.

And that is really going to radically change the landscape for learning and lifelong learning than anything else. And that's pretty much what we want to do not just in India, but around the world.

What's your take on the offline and online channels coming together? BYJU’S made one of the biggest acquisitions of all time with Aakash. Now we see that a lot of interest is being generated in the market for more acquisitions. Will upGrad consider any such opportunity?
No, I think online-offline anywhere in the world has its own business sense. So, each one to their own has a business sense, because it is true that people still like to touch and feel. Unfortunately, what the pandemic has done to online education is that it's given it a little bit of a bad reputation by thinking online education is just sitting in front of a Zoom, or working in a live lecture, whereas it is so much more in terms of deep learning.

So that's something that we'll have to slowly correct. But online and offline can co-exist. I think in the higher education space, it’s going to be much more digital, primarily, because most people want to start working at an early stage. It is unlike in the K12 sector, where everything is a calendar event; going to school is a calendar event, going to college is a calendar event. As a working professional, however, you would prefer to do something where you can continue to earn while you continue to learn.

Through your NGO, Swades Foundation, you are delivering groceries, getting people vaccinated. Education campaigns are being run for villagers on how to take care of themselves following this deadly virus attack. How much work has been done and what more needs to be done?

For the last five to six to seven years, we’ve been building the foundation. Our focus has been on empowerment, that is, the community must understand, must learn, must plan, must be involved, must contribute, and therefore must celebrate.

So, the entire approach for us, whether for an Adivasi community or for the poorest of the poor, has been about learning, training and involving. First, and at the core of us is the Village Development Committee -- it takes ownership for everything. They escalate problems, and they find solutions.

We enable and are a catalyst in the whole process. Now, that does not mean that we have not actually done things physically. When it comes to livelihood, the kind of pre-planning we've done over the last five - seven years of water purification, flood irrigation and creating entrepreneurs for the marketplace.

That is something that has really inculcated the core of how to work in a crisis like the pandemic in the last 1.5 years; everyone is much more aware. In April when the pandemic was just starting, we had a huge amount of reverse migration happening. So that was the big challenge. But the Village Development Committees handled that very well.

We’d work with a little less than a million people. We have 97,000 reverse migrants coming in mostly from Mumbai, a few from Pune and Solapur that came back there. So how do you administer those people, both for supplies and food? So, our two challenges were to manage the reverse migration.

The other one was that about 15 percent of our entire population were Adivasis and daily wage workers. For them, once the daily wage stopped, it was starvation. There's nothing there in between. So, at that stage, how do we involve them, for them to get rations on a village, hamlet, and on a community basis. That was pretty much the two things we did then.

And the third one, of course, was massive medical reinstatement, where tertiary hospitals in India are still very, very few. So, even if people want and have a medical device with them, they travelled 30, 40, 50 km to get SOS help. So, the question was how do we build temporary sheds and temporary places for medical care? These were some of the big challenges.