The New Acceptance of Online Learning - Ashwin Damera, CEO of Eruditus/Emeritus

SHIV GAGLANI: Hi I'm Shiv Gaglani. As regular listeners to Raise the Line know, the education tech sector has been on fire as COVID has forced the world to reckon with online learning on a massive scale. Our guest today, Ashwin Damera, has witnessed the frenzy firsthand as the CEO of Eruditus/Emeritus, which makes Ivy League education accessible and affordable to executives around the world. Partners include 50 top-tier universities such as MIT, Harvard, Cambridge, and Columbia. The company just raised $650 million and has begun moving into the K-12 space. Before we get started with the interview, I would love to give a quick shout out to two of our advisors at Osmosis, Ahmed Haque and Jamie Farrell, who are now both on Ashwin's team, as well as Ranil Herath, who runs the Emeritus health field within Emeritus. Ashwin, I would like to really thank you for taking the time to be with us today.

ASHWIN DAMERA: Thanks, Shiv. Thanks for the opportunity. Looking forward to this conversation.

GAGLANI: I know a lot about your background and story as a fellow at HBS alum who graduated in 2005, but for our audience, in your own words, can you tell us a bit about your journey and what got you to start Emeritus in the first place?

DAMERA: I always like to say that I'm a first-generation entrepreneur. I don't come from a family of entrepreneurs, or even, for that matter, business people. I finished my education, undergrad, in India; I was a chart accountant, and went to Citigroup. I knew I didn't want to become a banker, and so I decided to do an MBA. Harvard Business School was nice enough to have me, and that actually changed my life, because I realized in business school that I really wanted to be an entrepreneur. 

I had a couple of my classmates write me a first check of $100,000 to get me going. More importantly, at Harvard Business School's business plan contest in 2005—which seems like it's ages ago—we came runners up. There was a moment where I said, "Oh, maybe I'm onto something. Maybe I can actually do this.” Then there was a dilemma because I could've also gone to McKenzie and worked in New York, a city I love, or come back to India and start Travelguru, which was the name of my first start-up. The decision was a tough one, but in hindsight, perhaps the right one. That led to my first start-up. As a rookie entrepreneur, I made all the mistakes that I was taught in business school not to do, and had read in many books. But you know you don't learn unless you kind of do it the hard way, I suppose. 

As a second-time entrepreneur with Eruditus and Emeritus, it's funny, I think I work less, I stress less, but there is a much larger business today, and a much larger opportunity to build something enduring in the future. But I think all the lessons of my first start-up, have kind of been plowed back into my second one. So that's been the journey. 

We are in the edtech space, which, like you said, is seeing a lot of excitement in the last few months, but our mission is the most important part of what we do. Our mission is to make high-quality education accessible and affordable. You and I have been fortunate, we could have perhaps packed our bags and gone to Harvard Business School or other top institutions. I had debt at the end of that two-year master's program, which took some time to pay off. But most people in the world can't afford that. Even if they can, many of them can't get in. So how can we make that quality education accessible to people? This may be the largest social problem that our generation deals with: skilling, up-skilling, re-skilling, and so on and so forth. That is what the company does; that is what I am passionate about. I suppose that's what we'll talk about for the next few minutes.

GAGLANI: Yes, speaking of lessons learned, before we dive right into the work that you do at Emeritus and Eruditus, and how that's changed, what are some of those core lessons that you have learned? I know there are probably countless of them, but the first one or two that come to mind.

DAMERA: There are many, and by the way, since we can't talk about all of them, there's a book, I think it's called The Founder's Dilemma, by the HBS Professor Noam Wasserman, which I suggest to anybody who is looking to startup. Before you start up, read that book. It has basic stuff like, should you have a founders' agreement? If you have two founders, should you split it equity 50/50, or is there some other way? What if one founder leaves, and so on and so forth.

I think the success of the start-up, to a great extent, is influenced by the first ten people at the table, and especially a co-founder. In my first start-up, we had a lot of issues with co-founders, but in my second, I was fortunate to work with Chaitanya, who is my co-founder. I can say that we complement each other very well. There are moments when the stress levels are high, but one calms the other down. Usually, it's him calming me down, because I get more stressed, and he's very calm, but that's complimentary. But you also need somebody who's like your midnight buddy; you can pick up the phone and talk to them and say, "Hey, this problem, how do we solve this?" If that's the co-founder, that's great. So the first ten people who you hire, really think about shared values. That's very important if you're trying to build something that's very long term.

The second piece of advice is unit economics. I think, again, Professor Bill Sahlman at Harvard Business School said, "The best form of fundraising is from customers, not from venture capitalists." If you can build a product or a service that actually has product-market fit from the get-go—which is difficult, not always possible, but if you can. The proof of that will be paying customers. Then you will be able to grow your business without raising a lot of capital. Of course if you do raise capital, you're raising it for growth and expansion, instead of just staying afloat. So think very carefully about that, getting money from customers. By the way, when you get paying customers, it does tell you that your product has value. I'm a big believer that you can build a large premium base on a free base, and many companies do that. Very few really are able to monetize that into dollars, so thinking about paying customers I think is an important lesson for start-ups to figure out early on in their journey.

GAGLANI: Those are some wonderful lessons and take me back to Aldrich Hall with both the founders' dilemma and hearing Bill Sahlman speak. Why we launched the Raise the Line podcast was because of the COVID pandemic and how different fields—healthcare, government, education—are totally being disrupted. You guys were obviously growing very quickly even before COVID, and then the pandemic hit. Can you talk to us a bit about how you've responded to COVID, both in terms of what your company does, but also your organization as a company itself? While we're talking, you are in India, and I know Ranil is here in Chicago. It's truly a global company, it seems.

DAMERA: Yes, Ahmed is in New York, Jamie is in Florida, and we have people all over. I often joke by saying, “We are all over the place.” But in a good way. The pandemic for the first few months was very confusing, worrying, and we were like "Oh my God, what's going on?" Obviously, our attention focused on the health and safety of our people, even today, we are working from home, remotely, in most places in the world. I thank good fortune that all of our people are well, and safe, so that's the first thing. 

On the business side, a fundamental shift has happened, Shiv, and I think it's perhaps here to stay. It's at two levels. One is, there was always a question on the demand side which is, "Is there something pure about classroom learning, and something that's not so pure about online learning? The word online means many things to many different people; there are some bad examples of online and some great examples of online. But what we've seen in the last twelve to eighteen months perhaps is that, from the six-year-old child to maybe an eighty-year-old person, everybody is online and learning. The myth that you can't learn, you can't retain information, that the pedagogy is not effective, to a great extent has been busted. There are definitely use cases where the classroom pedagogy is better, but I think the belief that online was somehow subpar, significantly subpar, I think that has gone away. That's a great opportunity for players like us, because 100% of what we do is online. 

More importantly for us, we used to have a very difficult time convincing faculty and universities to put more of their courses online. It's a lot of work, because, unlike a Coursera or an edX, we actually have a three-to-six-month design process with the faculty. We are creating content with them. We are filming for them, we are doing post-production, etc. That's a lot of work. For them it was, “Is it worth it?” “Is it going to be as effective?” and all of these questions. But again, given  what has happened because of the pandemic, they've been teaching online even in the masters and undergrad programs. There's a much greater receptivity in academia to do things online today, which is great, because our problem in our business was not having not enough students to teach but that we didn't have enough courses. This really has helped boost the supply side. That's why we are growing as fast as we are.

GAGLANI: Yes, that makes a lot of sense. I'm glad you mentioned Coursera, 2U, edX; we've had Jeff and Chip, and a number of those on our podcast as well. It seems like companies are trying to do some of the same things across the cycle, ranging from the MOOCs, which were very hyped a decade ago, and sort of fell away, but have resurged now that they have longer-form courses, certificates, and degree programs that are high-margin kind of products but relatively low volume. To your point about freemium, where you can get a bunch of free people on your site, but the question is, can you actually get them to pay and see the value enough? How do you differentiate, both for the learners, as well as for the institutions, now that there are several other large, multibillion-dollar companies knocking the doors of John Hopkins, Penn, MIT, and those kinds of places?

DAMERA: Great question. The first thing I would like to say is, our mission is to make high-quality education accessible and affordable. So, I actually think it's welcome if there are many players trying to solve that exact same problem, because no one player can solve that. It's too big a problem. It's not just a problem in the United States, it's a problem in India, Latin America, Southeast Asia, Africa, China, everywhere in the world. So no one person can solve it.

Now, our approach is not a MOOC model, which is massive open online courses. It's a SPOC model, small private online courses. Even if we have 500 students in a specific course, we will break them down into cohorts of maybe 75. Each cohort will have a learning facilitator assigned to that cohort. Within that cohort, there may be groups of five or six. If you submit an assignment, you'll get feedback. There's live introduction with faculty during the course. 

So, it's high-touch online, and it leads to 85% completion. Ninety percent of the students say that learning outcomes were met. Many of our courses provide career services or coaching or mentoring as a layer. So it's really the education you would get if you were in a classroom setting, but it's done in a virtual environment. I think that's very different from a MOOC. The student who comes to us in a little more serious. 

The MOOCs would have 150 million, 200 million enrollments or registered users. Most of them are just looking for a content repository or a library. I could take an AI course, let's say an Android and GCI course. I'm never going to finish it, but I'm just curious. So I'll just go to the first meeting and drop out after that, but it's not a problem, because I never intended to finish. I'm a casual learner. What we do is for the more serious learner, somebody who really wants to get their hands dirty and learn digital marketing, learn the Google or the Facebook tools. We will put them through simulations, assessments, and all of those things. At the end of the day, they should be able to run an effective Google and Facebook campaign. So it's really skill-building, versus just content dissemination, is the way I think of a fundamental difference. More serious learners who are willing to invest the time and the money for a measurable learning outcome and a measurable career outcome is a space we play in. 

On the university side, again, we are going after more serious learners and the universities understand that. But our model of partnership is very different from a Coursera. I think they work with maybe 500 or 600 partners. We work with much smaller numbers, about 50 partners as of today. We try and work more deeply with them, and also provide them with a 360 solution. For example, with Coursera, I think, the universities have to create the course by themselves and put it on the platform. But we get involved in the design from the get-go. We actually sit down with the faculty. They have great ideas. They have great content. They are intellectual powerhouses. But how do we take that offline kind of pedagogy and translate it online? We need to add some simulation, some role plays. So we get involved in that process, because we know that when you design courses for working professionals, and you want high learning outcomes, you have to design them in a certain methodical and structured way. We have a theory of dominant design when it comes to online education and we'd love to do that with our school. So very different in the engagement model, more high-touch here as well, and more deeply engaged with our partners.

GAGLANI: That's great. That makes a lot of sense and certainly is a good way to differentiate your service offering. Those are remarkable completion stats and net promoter scores as you were sharing. 

You started out of business school and digital marketing courses. Ranil and I have spoken a bit about where you all want to go with healthcare offerings. Given that our audience is primarily current or future healthcare professionals who are raising the line, improving healthcare access, we'd love to hear, what are your thoughts on the healthcare ecosystem, both for education, as well as how healthcare as a field is changing now because of COVID?

DAMERA: It's a great question and I wouldn't claim to be an expert on that, but we look at all of these sectors. So yes, we started with business schools, and then we worked with engineering schools. As we think about the professional schools obviously, the medical schools, so healthcare, public health, nursing, but also other areas. But the problem statement, Shiv, in some sense is similar to all of these, which is: What's happening at a macro level, and at the industry level? 

Because of the digital disruption, every single industry in healthcare is not any different. It is being transformed significantly. And so what that means is that professionals at various levels have to add on skills to their repertoire. What are these skills? This stuff is like analytics. A lot of the healthcare problems today will be solved through big data and through data science, digital transformation skills. We talk a lot about Fintech. This whole area of health tech and digital imaging and technologies, but also digital adoption for delivery systems. By the way, the analytics piece has a bunch of stuff to do with patient data. There's privacy and cybersecurity and a bunch of these things. No industry has been spared from the onslaught of digital and impact of that. Healthcare is no different. Yet if you think back on how much of this is actually taught in medical school. When somebody becomes a nurse or a doctor, or any form of a health practitioner, how much of these skills are actually taught?

That's the same case with business school, or engineering, or any other school. What we are trying to say is, look, there's a large re-skilling market for healthcare professionals. That doesn't mean you need to leave your job and do a full-time program, or necessarily get a masters or doctorate. Could you do that while being employed, learning while earning? That's the opportunity that we are trying to also to go after for healthcare professionals. We work with many universities that have fantastic medical schools. We work with Harvard Business School. At Harvard Medical School, we've created a program with them on digital transformation healthcare, which, interestingly, was first offered in Spanish. Those kind of collaborations are things that we're exploring so we can bring the intellectual capital from these universities to the up-skilling, re-skilling problem in healthcare.

GAGLANI: That makes a lot of sense. We've had several leaders of health systems and hospitals on the podcast who talk about the need to train leaders, and how quickly things are changing underneath them. We're speaking just a couple of days after Amazon announced that they will be providing free college tuition to their full-time employees, and highly-subsidized to their part-time employees. This is definitely a trend we're seeing, where institutions have learning and development offices that subsidize or pay for professional development. 

One of our advisors at Osmosis is Aaron Skonnard, who's the co-founder and CEO of Pluralsight. We were just talking the other day about how that business began, 100% B2C, where the end-users would come to them and purchase, and now is majority B2B, selling to Facebook and Microsoft and those kinds of companies. Where do you see this shaking out? Where is it right now, and then, where do you see it shaking out over the next five or ten years?

DAMERA: We are predominantly B2C, but we are making growth in B2B as the course catalog has expanded. But if you look at professional education more broadly at the industry level, two-third is enterprise, and one-third is consumer. I think post-pandemic, there's a tight labor market and many companies including Amazon, Walmart for that matter, and many others, are going into this pay-for-education kind of a policy, which I think is welcome. And most of them are doing it for front-line workers, blue collar more than white collar, which I think does show that employers do care about the learning of their people. 

It comes back to this problem which is the biggest social problem of our time is the re-skilling and up-skilling of the workforce. Take large industries. Retail is a great example, and you'll see it in construction, you'll see it in a manufacturing, and you'll see all of these traditional industries, even banking and financial services. A lot of them are being disrupted by these new-age skills.

The enterprise piece is interesting, but ultimately, the way I like to think about it is, there is a skill gap. The learner who is a professional needs to feel it, and needs to value a course or some learning that helps them close that skill gap. It's then incidental whether they pay for it, whether they pay for it and the employer reimburses it, or the employer pays for it, or somebody else subsidizes it like an association or a government. If the content and courses you have are actually addressing and solving that skill gap, there's value. Somebody will pay for it.

GAGLANI: Totally. It's just about the mechanism to get there. What are your hopes for the company in the next five years? You've just raised this massive round, are making a lot more courses and partnerships, and expanding these verticals, including K-12. Where do you see Emeritus/Eruditus by 2025?

DAMERA: That's a good question. The future is so bright. It's so bright that I can't even see it. I'm just kidding. In the last twelve months, thereabout, we enrolled about 100,000 students for our various courses through our university partners. I like to believe that that is impact because we've touched 100,000 lives. So my first goal for five years would be, could we make that one million lives, so 10x that in the next five years. I don't know whether we'll do it. I think there's an opportunity, because you think about the gaps and the number of people that need to be retrained over the next five years, it's huge. So, I'm hopeful that we can do it, but that's really the first goal. From that ambition will flow revenue numbers, people, courses and all of that. But the real big, hairy, audacious goal is, can we touch one million students in 2025? That would be the big ambition.

GAGLANI: That's awesome. It's similar. We obviously operate on a very different scale;  we don't do long-form courses and cohort-based courses, but our big, hairy, audacious goal is to educate a billion people by 2025. That includes if you have a child or a parent who has asthma or diabetes, watching one of our videos on asthma or diabetes. We have two million Youtube subscribers, so we're 2% of the way there, in terms of subscribers, but in terms of people who viewed it, we're much further along. So that's ambitious; I'm sure you guys can get there. You have the right people around you.

I know we're coming up on time, so the last two questions I have are: first, what advice would you give to young people today about pursuing their careers, whether in healthcare or education or just in general?

DAMERA: That's a very broad question; let me just say one thing which is how people think and worry about failure. Many people have asked me, "Hey, what makes you successful as an entrepreneur?" That's true of what makes you successful in anything that you do—not just an entrepreneur, but say, cycling, if I want to achieve something there. What makes me successful? My simple answer is, “I tried.” That's it. If you don't even try, you're never going to be successful. 

So the only piece of advice I give people is, especially, those who want to be entrepreneurs, whatever space they want to be entrepreneurs in, is, you've got to go and you've got to try. If it doesn't work out, that's not failure, that's learning. And as a young professional, you are much better served getting that kind of a lesson, that kind of learning, early in your career versus later.
My first start-up, by any definition, was not a success. But for me, it was massive learning. That is the foundation on which my second startup, which is Eruditis/Emeritus, was built. But it was much better that I got that experience early in my career, because you then learn a lot, and you can use that. That's the one piece of advice I can give.

I find it funny giving advice, because we're all learning. We are also making mistakes and figuring things out as we go. I've never run a company this big, and I don't think I would want to do it again, because this is perhaps the last startup. It's been a fun journey. Be outwardly ambitious. Try new great things. Like you were saying, a billion learners on Osmosis, that's fantastic. But be modest in turn. At the end of the day, when I'm done with all that, I shut my laptop. Look, we're just doing our best, like everybody else. You've got to have that sense of humbleness or humility and take life as it comes. Those are just perhaps two things that I can share.

GAGLANI: That's really wonderful advice. My last question is, is there anything else you want our audience to know about you, Emeritus/Eruditis, or anything else in general?

DAMERA: Well, I can say a few things. One is, the whole idea of skilling, re-skilling, and up-skilling. I think we are in a knowledge economy in the real sense. The real competitive advantage has now moved from nations, from industries, to now, the labor force, to individual skills. Today, if I can learn a specific skill, for example, if I can get better at business analytics or digital transformation, I'm probably going to be better at my job, and have a better career than if I stay with what I have and I don't add any skills to my repertoire. 

One thing I want to urge everybody to think about is, what got you here is not going to get you there. This is true at a country level, a business level, and an individual level. I'm most interested in the individual level because I'm interested in what I can do to change myself first, and then worry about other things. I have to ask myself and everyone has to ask themselves, "What do I need to do more of? What do I need to do less of? And what do I need to stop doing?" Just thinking in that sense is the only competitive advantage that we as individuals and as professionals have. That's why what I do at Emeritus and Eruditus is fun, because that's what we teach people. But beyond taking a course, it's useful for all of us to think in that fashion.

GAGLANI: That's awesome, and that reminds me something of my professor at HBS, Josh Margolis, my lead professor, said.

DAMERA: My lead professor! What a fantastic professor.

GAGLANI: That's awesome. I don't know if you got that framework, or if he helped teach you that, but, "Keep, Stop, Start." We always used to do that when we're doing retros. 

DAMERA: The one thing that Josh made us all do at the end of the class, I don't know if he did this with you as well, he said, "What is this one-line motto that you want to live your life on? Write it down and keep it with you." I said, "Life is to give." 

I feel that through this journey at Eruditis and Emeritus, and by teaching, by helping universities teach more people and change lives, it is giving, which is what makes it a lot of fulfillment and fun.

GAGLANI: Absolutely, couldn't agree more. Ashwin, thanks so much for taking the time to be with me on the podcast, and more importantly, for the work that you're doing to re-skill and up-skill people all around the world.

DAMERA: Thank you Shiv. This was a fun experience. Thank you for having me.

GAGLANI: With that, I'm Shiv Gaglani. Thank you to our audience for checking out today's show, and remember to do your part to flatten the curve and raise the line. We're all in this together. Take care.