top of page

'TOO BIG TO FAIL' ... Is it a truism or plain poppycock ?

Updated: Jan 20

The book 'Too Big To Fail' is of course the Inside Story of How Wall Street and Washington Fought to Save the Financial System from Crisis ; and themselves. It's the definitive story by Andrew Ross Sorkin of the most powerful men and women in finance and politics grappling with success and failure, the ego and greed, and, ultimately, the fate of the world’s economy. Now, each generation has brands or companies which are by definition 'Too Big To Fail' and each generation and economy deals with this phenomenon ; only, we tend to recall the TINA factor or 'There is no alternative' to justify that. Despite our trite acceptance of homilies like 'Change is the only constant' , there appears to be a basic human weakness or even longing for an entity or person, who is larger than life, which would then give a little more permanency to life.

Iconic brands like Sony Ericsson, Cingular and Compaq have vanished over time. Kelvinator, Allwyn & lately Jet Airways & Sahara are brands which are fading. Spice to Hutch, Aircel to Telenor ; do we remember any of these now ?

The elephant in the room is of course 'BYJU' which can be best described as a failed success story! Why, because founded in 2011 this company founded by Byju Ravindran & Divya Gokul Nath notched up sales of $188.8 million in 2018-19 !

For a venture-capital funded start-up, this was truly phenomenal and seemed to deserve the success. But this is precisely where its troubles began. Curiously it first became bigger and better before it met its fate in which it is today.

On 30th January 2020, the first case of Covid-19 was reported from Thrissur, Kerala. Of course, the Covid catastrophe flattened economies across the globe but actually boosted the prospects and fortunes of start-ups like BYJU's . BYJU's transition from ‘In Person Learning’ to ‘Virtual Learning’ may have been prompted by the Covid years and led to acquisitions of White Hat Junior @ $300M, Aakash @ $950M, Great Learning @ $600 Million, EPIC @ $500 Million......

Probably, by this time BYJU's had acquired almost a prophetic cult status & no one least of all the venture capitalists appeared to object. It was probably greed, power & then hubris which put BYJU's on a spiral first to take off & never to return.

Ultimately these acquisition strategies & spending big bucks on brand endorsements etc was seen to be a folly but the more basic flaw was the bet on 'virtual' even after the pandemic which saw the return to classrooms.

Of course, those who live by the sword (of high valuations and funding) will surely die by it and the final straw was that the loss of $ 327 million by 2021 has knocked the bottom of the valuation from $ 30 Billion to less than $ 1.5 Billion now.

So, sadly the first sentence of Leo Tolstoy's masterpiece Anna Karenina 'Happy families are all alike, every unhappy family is unhappy in its own way' reads like a grim prophecy if we read happy as successful and families as businesses.

8 views0 comments

Bình luận

Đã xếp hạng 0/5 sao.
Chưa có xếp hạng

Thêm điểm xếp hạng
bottom of page