- The Runway Ventures
- Posts
- 🧑🏻🏫 Bluelearn shut down (and I'm impressed)
🧑🏻🏫 Bluelearn shut down (and I'm impressed)
Why Bluelearn returns 70% of capital to investors (after raising $4M)
Admond Lee
July 28, 2024
Hey Founders,
Welcome to The Runway Ventures — a weekly newsletter where I deep dive into failed startup stories to help you become the top 1% founder by learning from their mistakes with actionable insights.
Let’s get to it! 🚀
Today at a Glance:
☠️ 1 Failed Startup → Bluelearn
⚠️ 2 Mistakes → Monetising the wrong audience
🧠 3 Lessons Learned → Pivot with purpose
🔗 The Runway Insights → 28 rules this founder learned the hard way
💰 Southeast Asia Funding Radar → Klean, a Malaysia’s sustainable recycling startup, raises $429K from Ficus Capital
☠️ 1 Failed Startup: Bluelearn
🚀 The Rise of Bluelearn
Founded by 2 ambitious students (Harish Uthayakumar & Shreyans Sancheti) in 2020 during the COVID-19 pandemic, Harish and Shreyans had a vision.
🇮🇳 They saw an opportunity to bridge the gap between academic learning and real-world skills for students across India, especially those from smaller towns and lesser-known colleges.
The Problem — Many Indian students in smaller towns lacked access to quality education and professional networks, which hindered their career prospects.
The Solution — Bluelearn provided a solution by creating an online community where students could learn new skills, network with peers, and find internships and job opportunities.
It was like LinkedIn, Coursera, and your college career centre all rolled into one.
 | 🤝🏻 Bluelearn’s mission was clear:
|
Their journey began modestly with a Telegram group where students could ask questions and share knowledge. This small initiative quickly snowballed into a massive community — and Bluelearn was born.
🔥 From there, Bluelearn was unstoppable with meteoric growth. By August 2021, they had raised $450,000 in their pre-seed funding round.
💰 The community continued to expand, and by February 2023, they had secured a whopping $3.5M in seed funding from prominent investors, including Elevation Capital, Lightspeed, and Titan Capital.
🗻 At its peak, Bluelearn boasted a community of over 250,000 members from more than 20 countries, including the United States, the United Kingdom, and Singapore.
📉 The Fall of Bluelearn
However, we realised that building a venture-scale business with BlueLearn was tough.
Despite their impressive growth and substantial funding, something was off.
💵 Money, money, money
The founders soon realized that scaling a venture-scale business was tougher than they had anticipated. The challenges of sustaining engagement and monetising their user base (mostly students) proved to be significant hurdles.
📌 Here’s what happened to Bluelearn:
2020 — Bluelearn was founded as a Telegram group by Harish and Shreyans before switching to Discord channel in early 2021.
Mar 2021 — Launched a live cohort-based course (Intro to the Stock Market) and made the first $1 🤑
With the high demand, they launched other lives courses including web dev, UI/UX design, data structures etc.
Aug 2021 — 💰 Raised $450,000 in its pre-seed funding round.
Dec 2022 — Launched the Bluelearn app with 3 major features:
A hiring platform for internships or freelancing projects
A feed for posting and interacting within the community
A place to see upcoming events and to view older ones
Feb 2023 — 💰 Raised $3.5M in seed funding.
Bluelearn app hit over 100k downloads
Launched more features to boost app retention and growth
Scaled to 250k users by the end of 2023
Early 2024 — Bluelearn went through multiple pivots to experiment with new business models 🧪
July 2024 — Harish and Shreyans officially announced that Bluelearn will be shut down and they’ll return 70% of the capital to investors 🙏🏻
Harish made a YouTube video to share what happened to Bluelearn.
Shreyans wrote an article about why they closed down Bluelearn.
🇮🇳 From its humble beginnings as a Telegram group to becoming one of India's largest student communities, Bluelearn made a significant impact on the lives of many students. However, the challenges of scaling and monetising their platform ultimately led to their decision to shut down.
💚 Despite its failure, I’m impressed by the founders’ integrity in returning 70% of the raised funds to investors. Why? We often hear a startup died after running out of money. How often do you hear a startup died because founders think it’s the right thing to do?
The self-awareness and the courage to make this hard decision are simply unmatched.
I'd encourage more people to start up and build in India, for India and for the world. We need more people to take risks and try out ideas that seem absurd. It's okay if you fail. I'm excited to share that a few of my teammates at Bluelearn have gone on to found their own startups.
Want to learn more about Bluelearn’s downfall?
⚠️ 2 Mistakes
Mistake 1: Monetising the wrong audience
During the funding winters of 2022-23, despite having a large community with decent app growth and retention, the founders realised they had to switch gears from growth to profitability.
💸 Here’s the problem:
• It was very difficult to monetise their audience which was 70% college students.
• This mismatch between the product and the target audience's willingness or ability to pay was a critical issue.
• In short, they built a party, but forgot to invite guests who are willing and can afford to pay for admission 🕺🏻
🧩 Even though they tried various models, including Income Sharing Agreements (ISA), apprenticeship models and others but none of them particularly showed strong signs of PMF, especially for a venture-backed startup.
Because the unit economics didn’t make sense, and they couldn’t find a feasible business model, Bluelearn went through multiple pivots to find a path to profitability but to no avail.
Mistake 2: Frequent pivots
While pivoting is good, having too many pivots could potentially lead to a loss of focus and direction as well as a waste of time and resources.
But pivoting is easier said than done and we didn't want to build something half-heartedly. It would be wasting our team's time and investors capital, and coupling that with the overall erosion of trust within the ed tech industry and more people wanting offline rather than online classes, we realised that despite having several years of runway ahead of us, we didn't want to be stuck in a place where we had capital but an absence of path ahead, and so we made the tough decision of returning capital and winding down the company.
As shared by Shreyans in his LinkedIn’s article, they couldn’t see a path forward to build Bluelearn meaningfully and grow it to become a big company in future, hence closing down Bluelearn instead of going through more pivots.
🧠 3 Lessons Learned
Lesson 1: Monetise early on
Having a ton of users is cool, but you know what's cooler? Making money! 🤑
I’ve written 30+ failed startup stories so far, and almost every venture-backed startup that focused only on growth without a clear path to profitability died.
My thought? Building a sustainable revenue model early on is not a good-to-have, but a must-have — especially in today’s down market.
🎯 In fact, this was also shared by Shreyan that they could have targeted working professionals instead of college students had they known how low the paying propensity was.
🌟 Key Takeaways:
💰 Ensure your business has a clear path to revenue from the start.
It doesn’t mean you need to be profitable at the start, but a plan to get revenue would give you so much clarity.
Test different revenue models early.
Subscription? Freemium? Ads? Find what sticks before you scale.
🙋🏻♂️ Understand your target audience
A large user base doesn't guarantee success if they can’t afford or aren’t willing to pay.
In Bluelearn’s context, does it make more sense to charge B2B customers (i.e. universities) by conducting classes for their students than charging B2C customers (i.e. students) for live classes?
To be honest, I don’t know. But the B2B approach seems to have better contract size and cash flow in my opinion.
Lesson 2: Pivot with purpose
When things aren't working, don't just throw darts in the dark. Pivot with a plan. When it comes to pivoting, I always refer to the framework used by YC on when and how you should pivot as a startup. Highly recommended!
🌟 Key Takeaways:
📌 Pivot based on what you have, not what you don’t have.
Let’s say you build a product A, you show it to users, and users tell you they don’t need A but they want B.
Product B is very different from A (in terms of problem or solution), so you build from scratch and show it to users again. But now users say they want C.
So you build C from scratch again.
This is typically a bad pivot as you build from scratch every time you pivot, instead of using the knowledge or technology that you have to build on top of it.
Before you know it, you’re basically running around the circle without moving forward.
Lesson 3: Integrity and courage to do the right things
Instead of continuing to spend investors’ money and resources to keep pivoting, Bluelearn’s founders had the integrity and courage to do the right things — return 70% of capital to investors and shut down the business.
🌟 Key Takeaways:
🥵 Quitting might be a necessary evil
When things don’t work out, you can either keep trying or quit.
You can keep trying if you still have ideas on how to build and grow your business.
However, if you’re running out of ideas to do that, and you don’t see a clear path forward, it could mean you need to make a hard decision to continue or quit.
🙌🏻 It’s all about the opportunity cost
At the end of the day, we all have finite time and resources.
When you say YES to something, it means you say NO to everything else.
When you say NO to something, it means you open up to try new opportunities.
There’s no right or wrong, only what’s best for you.
🔗 The Runway Insights
28 rules this founder learned the hard way (Link)
Understanding your user journey (Link)
5 unexpected lessons from Pixar and Disney (Link)
Understand the fundraising game in 3 minutes (Link)
How go grow your company’s LinkedIn followers (Link)
3 steps to write messages that people will enjoy reading (Link)
💰 Southeast Asia Funding Radar
💃 Rate Today’s Edition
What'd you think of today's edition?Your feedback helps me create better content for you! |
🌟 Top Review of the Week
That’s all for today
Thanks for reading. I hope you enjoyed today's issue. More than that, I hope you’ve learned some actionable tips to build and grow your business.
You can always write to me by simply replying to this newsletter and we can chat.
See you again next week.
- Admond
🤝🏻 Join our founders community on Discord:
Building a startup is one of the toughest things you can do. Why struggle alone when you have our community to help and support you.
This is the founders community I wished I had when I first started.
Disclaimer: The Runway Ventures content is for informational purposes only. Unless otherwise stated, any opinions expressed above belong solely to the author.
Reply