In a Class of his Own
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Ask Satya Narayanan R what it takes to build an enterprise from idea to an IPO - the answer would be 21 years. Incepted in 1996, Career Launcher (CL) Educate began as a personality development test preparation company and now counts itself among a listed entity in the education domain. CL has today 170+ centers spread across 90+ cities in India.
Our scheduled meeting with Narayanan is running half-an-hour late as he is busy meeting few young entrepreneurs who came to showcase some of their disruptive ideas. As an angel investor, Narayanan has invested in close to a dozen start-ups. His belief is that he gets to learn much by interacting with young entrepreneurs. Anything that’s close to knowledge, technology and education gets ticked by Narayanan. Narayanan did his Bachelors in Computer Science from St Stephen’s college, Delhi and then completed his MBA from IIM Bangalore. Immediately after graduating he joined Ranbaxy, but he realized that his heart lies in teaching.
CL was among the early test prep organizations which became a brand. The company’s focus has always been on its core values, like risk taking, openness, ownership, honesty and commitment and innovations, even while franchising. “One thing about franchising is that you have to look from the other person’s perspective while you are presenting your products,” shares Narayanan on how he moved it out from a seasonal offering. Currently, CL has 15 products (including JEE test prep, MBA test prep or law test prep) under its portfolio and is present at 170 locations and it wants to take its offering to 600 districts.
Talking about selection of franchisee, Narayanan says, “First they have to pass the academic council test. Following which, we provide them with our study material to read, understand and prepare a model. After 7 to 10 days, they have to come back with an academic model and take mock classes. Once academic council approves the presentation, they have to sit with the business council. I think it is okay to take a longer time to get the right person rather than rushing the process.” Franchisees in Dehradun, Kanpur, Varanasi, Kolkata, Mumbai have been there in the system from 2001, which formed the start of CL franchise.
Sharing his tryst with franchising, Narayanan states, “Even before I started CL, I wanted to take up the franchise of a Chennai based test prep organization Campus Abroad. When I approached them, the owner told me to pay him Rs 1ac. I had Rs 7,000 in my pocket and thought of starting my own test prep class by investing Rs 5,000.” He went on to start his own test prep business with four chairs, one table in a room. Soon 20 to 25 people from his batch came to join him, including Gautam Puri, his long-time friend, who is now the MD of CL Educate. Narayanan says, “I am absolutely certain that the franchise model is far more powerful than the employee driven model.” Experiments with franchising began in 2000- 2001. From the first franchisee in 2001, the company moved to 50 franchises by 2005.
Talking about what brought conviction in this model, Narayanan says, “We had 100 percent conviction that without this model there cannot be growth.” Sharing the success he witnessed via franchising, Narayanan adds, “Franchising model is never a push model. It works only when people come and stand at your door step and make a request that they want to become your franchisee and you should be able to say no to nine out of 10 people.” For CL that had started happening from 2002-2006 after it witnessed tremendous success in Delhi.
Today, the nodal cities still run company-owned centers. The top 10 state capital continue to operate company owned centers. A lot of CL franchisees happen to be IIM and IIT graduates. Out of the 170 centers, 45 per cent of the centers are still company owned and the rest 55 per cent are owned by franchisees. Globally, CL has forayed in the Middle East and is keen on further expansion. Going forward, the focus will be on building a asset light model. From closing September 2016 at Rs 1606.98 million, the aim now is to go up to Rs 1000 crore.
Narayanan believes knowledge services and research services will play a key role in the writing of the second chapter of CL. Speaking about his entrepreneurial journey, he believes more than the start, the period between 2008 and 2013 was the most difficult as the company experimented with newer offerings. Schools are another business where CL spent time and money building it. The company spent 2006-2016 building Indus World Schools. The 17 school portfolio is not a part of the listed CL Educate anymore. The only paper that comes to Narayanan’s cabin is an Urdu newspaper. Even the white board with other calculations has a few lines of a couplet written in Urdu. Narayanan who has authored two books of Urdu poetry is now learning Sanskrit as he plans to translate those books into Sanskrit.
(This article was first published in the May issue of Entrepreneur Magazine. To subscribe, click here)