QUOTE
"Sustainable Living and Consumer (Use n Throw) culture will never cross path. Former offers life, later is Road to Perdition. West, Wake up!." - The Mother Nature
BUSINESS UPDATE
The Earning Lesson
The 3 Idiots may have served well in inducing epiphany as far as the state of our education system is concerned, but it will take more than their placebo chant ( "Aaa..ll is well" to reform it. However, even as most of us chuckled through the film, commiserated with the students and promptly forgot about the systemic ills, there has been a minority that has been working towards a solution for almost a decade now. Leading a silent revolution, these entrepreneurs have made such a strong impact that a new word has been coined in the academic lexicon: edupreneur.
"Our schools and colleges churn out students with degrees, but don't give them enough capability to crack the entrance exams at home or abroad," says Akrita Kalra, founder, Jamboree, which helps students with admissions in overseas colleges.
This gap between rote learning and skill training has been a cause for concern. The 'White Paper on Reforms in Higher Education' released by the Associated Chambers of Commerce and Industry (Assocham) estimates that in 2020, India will have a surplus of 47 million people in the working age group. By this time, the US will be short of human capital by 17 million, Japan by 9 million and Russia by 6 million. So, our biggest bane, population, can be our greatest blessing if we provide the right training and skills. Vinay Rai, chairman of the Assocham Expert Committee on Education, said, "Make education more meaningful and application-based so that hungry industries find skilled populace readily and do not agonise over the lack of talent."
Tapping the potential
If you consider the customer base, that is students, that can be tapped, the number is staggering. According to an HDFC Securities' institutional research report on opportunities in higher education, there were 20 million students in 17,000 colleges, in 2008. The gross enrolment rate for higher education is 6 per cent and is expected to double to 12 per cent in the next 10 years.
As the economy grows, the demand for skilled workers is going to be higher, which will translate to need for specialised education. The education system is still bogged down by red tape and it takes a lot of time to introduce new courses. This is where private institutions have muscled in. Currently, there are 700 private colleges and 10 private universities in the country. Some of these colleges and courses are not recognised by the government, but this has not deterred the students from enrolling. All they require for the institutes is to provide marketable skills and fulfill their promise of placements. Now, even a tier III city has call centre training classes, English tutoring institutes, air hostess training centres, animation studios and short-term radio jockey courses, among others.
Moulding young minds
The most dramatic change can be seen in the mushrooming of preschools. Lina Ashar, chairperson, Kangaroo Kids, was among the first to spot the opportunity. In 1993, armed with a bachelor's degree in education and teaching experience from Australia, Ashar started a preschool at Bandra, Mumbai, with 25 kids. "The only reason people sent their children to pre-schools was to ensure they could get admissions in renowned schools," she says.
Ashar decided to change the mindset do away with rote learning and concentrate on confidencebuilding exercises. She borrowed Rs 30 lakh from her father to buy a 600-sq-ft space. "The initial days were tough, especially while trying to understand Indian laws and dealing with the red tape," she says. "It also took about a year for the word to spread as I had no money to advertise."
Her strategy paid off as she opened a second branch at Juhu and then went on to set up shop in Hyderabad, Chennai and Bengaluru. Ashar then branched out to regular schools by opening the Billabong High International Schools, which cater to students from classes I to XII. Her latest venture is a chain of day-care centres called Brainworks, which also have hobby classes for older children. In 17 years, her initiative has grown to include more than 80 schools. "To be a true entrepreneur, you need to find your calling. Your destiny is guided by your will power. If you think you can, you will be able to," says Ashar.
Virtual tutors
Supplemental education is another area where edupreneurs are making their mark. We are slowly moving away from the local masterji to long-distance online tutors. Learning Hour, the brainchild of Riju Gupta, Mohit Bansal and Chandan Agarwal is one such venture. After passing out from IIM, Ahmedabad, in 2003, the batchmates got lucrative jobs, but were more interested in starting their own business. After refining the idea of online tutoring for nearly a year, they launched Learning Hour in March 2006. They then began looking for a suitable market. The US already had a lot of players and India wasn't a viable option as the Internet penetration was low. So they focused on the UAE. To promote the venture they held road shows and advertised aggressively.
The initial response was slow. "Most parents weren't sure that their children would study without the physical presence of the tutor, so it took time to convince them," says Agarwal. To ensure that their start-up was a success, the trio concentrated on the most important aspect of a business customer satisfaction.
"We periodically called up the students to get feedback, recorded sessions and conducted sample checks," says Agarwal. After a year, the venture was acquired by Educomp Solutions. "It was a good move for us as it gave us access to Educomp's customer base and helped us pump in money to take the venture further," says Agarwal. Learning Hour now has 400-500 part-time tutors, who teach about 8,000 students a month. The next step is to launch a test preparation centre by April 2010.
Kalra began her entrepreneurial journey when she was in class VIII. She began giving tuitions to the neighbourhood kids so that she could earn pocket money. In 1989, Kalra cracked the SAT exam and got admission in Brown University, USA, but did not join due to financial constraints. Three years later, after getting her bachelor's degree in commerce, she cleared the entrance exam for XLRI, Jamshedpur. "I realised then that I wasn't interested in a 9-to-5 job, but couldn't figure out exactly what I wanted to do," says Kalra. So she decided to continue tutoring, this time with two students who wanted her to help them get through GMAT, the entrance exam for management colleges abroad. "I taught them in the garage of my house and used the family's dining table. My only investment was Rs 800, which I spent on buying a blackboard," she says.
"The biggest obstacle was my age. I was just 20 years old, so people were sceptical of whether I could help others achieve their goals," she adds. So she offered two free lectures as a demo. Jamboree is now a Rs 10 crore plus company, has 12 centres and provides coaching to 15,000 students a year.
Off-beat choices
Teaching is not the only option in this field. You could take the lesstrodden path, as was done by Delhibased Rabani Garg. She wanted to transfer her love for books to her daughters and came across other parents who had similar aspirations. This prompted her to start Reading Caterpillar, a children's library, in April 2008. Operating from her home, she began a story hour for children aged between two and eight years to get them interested. This led her to expand her venture to a book reading club.
"I want children to appreciate books and expand their creative horizons," says Garg. The fee for library ranges from Rs 1,500 to Rs 3,000, depending on the period of membership. Now, Garg also organises music sessions, weaving classes, art classes and origami workshops. As the library grew to 700 books, Garg shifted the premises to Nizamuddin and is set to start another branch in April this year.
Like any other venture, education start-ups also require a lot of hard work. "I have taken classes for nine hours, researched till 4 in the morning, and then woken up at 8 a.m. to take classes at 10 a.m. It has been hectic," says Kalra. It is this perseverance that ensures excellence in education, be it as a student or as an entrepreneur.
GOOD FOR YOU
Ten Trends For 2010 : A cloudy, tribal Internet.
A new decade is right around the corner. I expect we'll start to see a lot of prognostication soon, so I will attempt to get out ahead of the crowd. At Catalyst we research growth industries and invest in businesses that have recurring, advertising or subscription-based revenue. Growth industries ride the big product adoption trends. Here are 10 big industry trends we intend to capitalize on:
Applications move to the "cloud" -- An obvious prediction, but its importance cannot be overstated. Software and content will continue to migrate to the Internet, or the "cloud." Devices on the edge will therefore be able to simplify and specialize, like net books for Web surfing, iPods for listening to music, BlackBerrys for accessing corporate information, Kindles for reading. Business applications will rapidly move to the Internet, where they are cheaper to deliver, more frequently upgraded and will allow access to more real-time information.
The Internet is all around you--As applications, content and communities move to the Web, we become increasingly dependent on the it and will demand access everywhere and at all times. The functionality of smart phones and other wireless access devices will keep increasing, so that we can wirelessly do most of what we currently do on the computer. Wireless networks will dramatically increase the amount of data capacity and will at least rival the speeds of today's DSL lines. We will get to the point that we're connected to the Internet 24/7, both for work and for fun.
The web gets smart, really smart--As more information flows through the Internet, parallel processing technology will enable an Internet that understands the relevance of information as it appears in real time. The confluence of all of this data and these technologies will necessitate sophisticated algorithmic models to aid interpretation and decision making. Many of the great advances will be in what is today called business intelligence or business analytics. The speed in which managers and marketers can react to changes in the business environment will accelerate dramatically.
Sensors, sensors everywhere--With a Smart Web analyzing data and ubiquitous wireless network access, Internet-connected sensors will be measuring all sorts of data. Our vital signs, energy usage, soil moisture, traffic patterns, manufacturing efficiency … it will all be tracked remotely and analyzed in real time and fed into the Smart Web, increasing business productivity. Some have called this the "Internet of Machines," "machine-to-machine communications" or "M2M". Asset productivity and utilization will soar immensely, reducing the relative demand for business investment overall. The combination of Web-based software, the Smart Web and M2M will create one of the fastest leaps in worker productivity in human history over the next 10-20 years.
The decentralization of medicine--The current hospital-centric health care system is an inefficient amalgam of disparate systems that do not communicate with each other. Networked medicine, information record standards and focus on prevention and wellness could break it all apart. Data tracking can revolutionize disease management, nutrition, exercise, home health care and remote medicine. The centralized delivery model is more of an industrial-age organization form relative to the networked-based economy of today. The use of hospitals will decline in favor of doctor house calls, "video visits" and visits to (or visits from) specialists loaded with high-tech equipment and software.
The decentralization of education--The current one-size-fits-all educational system seems even more industrial age than our health care system. People learn in different ways and follow different life paths. Parents will want more choice in programs for kids. Adults will want more access to programs that help advance their careers. More learning will be done online and outside of a "school." Apprenticeships will make a comeback. More charter schools and private schools will be built. More will be invested in early childhood education. A much larger percentage of colleges and universities will be specialized and "for profit," while many nonprofit universities will leverage their brands to broaden their revenue streams to include some for-profit activities. Americans will have more opportunity to invest in themselves and to make themselves more productive.
Building the "electricity superhighway"--The shift away from fossil fuels will increase our reliance on electricity, particularly in transportation. The smart grid initiatives pursued today are equivalent to the Telecom Act of 1996--a catalyst that will lead to the transformation of the utility industry as the electricity superhighway gets built out. The implementation of a smart grid will allow for more efficient and balanced use of the electrical grid. Energy storage systems will take energy from intermittent sources like sun and wind or from traditional power plants during off-peak times for use during peak times. Power will continue to be sold from utility to consumer, but it will also flow from small-scale power sources like rooftop solar panels back to the utility when not being consumed. Small-scale energy storage systems like reversible fuel cells or batteries could do away with the whole concept of peak/off-peak pricing altogether. The move to electric or hybrid cars, combined with investments in more electrical generation capacity (from nuclear, alternatives and natural gas) and a smart electrical grid will dramatically reduce the largest cause of the U.S. trade deficit: our reliance on foreign oil.
The integration of transportation--If the last 50 years in U.S. urban development were about the buildout of the suburbs and the last 20 years were about the buildout of the outer suburbs, or "exurbs," then the next 10-20 years will be about lashing together our far-flung metropolises with an integrated transportation network. There will be a great deal of investment in rail, both commuter rail and inter-city rail (within 300 miles). Rail will also be more integrated with our other transportation hubs. Rather than a trend of suburbanites moving to the cities (a "trend" not supported by any data), the city will likely move to the suburbs as density increases and transportation patterns evolve. Very light jets, or "VLJs" will get rolled out, allowing for more direct flights between non-hub destinations. There will be a movement in favor of time-shifting commutes and increased adoption of telecommuting. A more integrated and efficient transportation network will benefit both the environment and the productivity of the American workforce, which currently wastes $87 billion per year in fuel and lost productivity by sitting in traffic jams, according to a 2009 report by the Texas Transportation Institute.
Workers of the world, connect!--Tom Hayes wrote an interesting new book called Jump Point: How Network Culture is Revolutionizing Business, that hypothesizes how the world will change when the 3 billionth person (~50% of the world's population) becomes connected to the Internet in 2011. Change will accelerate and volatility will increase. New companies and ideas will arise seemingly out of nowhere and spread around the world in no time (see Twitter) and old, steady industries will appear to collapse in the blink of an eye (see magazines). These ideas and companies can come from anywhere in the world. Since young people are often the most creative inventors of new ideas, and the vast bulk of young people reside in the emerging world, many of the great new ideas of the decade will flow from the emerging world. Governments and companies that rely on hierarchy and control will struggle to adapt to a world of decentralization and volatility. While individuals will be empowered for good (blogging) and for ill (terrorism), they will also be more connected as a global community (see Facebook). Brace yourselves for a wild and interesting ride.
At Catalyst we intend to capitalize on these trends. That means we will continue to invest in software-as-a-service, managed hosting, data centers, vertical ad networks, online marketing, smart phone applications, wireless infrastructure, machine-to-machine communications services, for-profit education, education software and potentially remote medical services, medical software, smart grid services, energy efficiency services and next-gen transportation services and infrastructure.
