Satya Narayanan R spotted a profitable and unexploited niche in the education business.Today, his company straddles an entire range of educational services
1) Good in sports and studies: As a teenager, career or entrepreneurship was far from Satya Narayanan R’s mind. Like so many youngsters, Narayanan’s world revolved around cricket. His passion got a boost when former India captain, Bishen Singh Bedi, picked him for a 45-day cricket camp in 1985.
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| Education | Post-graduate Programme in Management, IIM Bangalore |
| Worked with | Ranbaxy Labs as Brand Manager |
| Time spent as employee | 18 months |
| Age at starting business | 25 years |
| Initial investment | Rs 650 |
| Sources of fund | Personal savings |
| Company | Career Launcher Education Foundation |
| Turnover | Rs 70 crore (2006-7) |
| No. of employees | 340 |
“Bedi encouraged me to join the National Institute of Sport’s camp at Delhi,” says Narayanan, who was then based in Meerut. The next two years of rigorous coaching instilled a sense of discipline in Narayanan, who also managed to do well academically. To be part of the under-19 team of the North Zone, he decided to drop out of school for a year and concentrate on cricket.
Though good at the game, he failed to make the grade. Narayanan took his failure sportingly and returned to studies to build an alternative career.
2) Developing the idea: Good grades ensured admission to St Stephen’s College, Delhi. “I did not get in through the sports quota,” he is quick to clarify. He moved to the Indian Institute of Management (IIM), Bangalore, and specialised in marketing.
In 1993, he joined pharma giant Ranbaxy as a management trainee at an annual salary of Rs 1.3 lakh. “I was enjoying the work but felt that only 20% of my potential was being utilised,” he says. That’s when he decided to do something on his own. He assessed his inclination and strengths.
“You must have a clear picture of what you want in life,” he says. He decided to develop a programme to help prepare B-school aspirants. “I focused on the group discussion and interview sections as the written test market was crowded with established players. Also, I had first-hand knowledge that many students look for counselling before the interviews,” he says.
3) Job-business balance: Narayanan hedged his risk. Instead of quitting his day job he worked on his idea during his free time. He started working on the personality development programme (PDP) format from August 1994.
Narayanan approached Delhi colleges where mock Common Admission Tests (CAT) were organised by students’ societies. He offered to create tests and evaluate them for free. “This was to help me create a database of aspiring students,” adds Narayanan. He picked the top 80 performers and offered to guide them free of cost.
“I counselled them after work and on weekends,” he says. By the time the CAT result for the written tests was out, Narayanan was ready with the PDP programme. Most of the students he had mentored had cleared the test and joined the PDP programme for Rs 1,250 for a six-week, 10-hour programme in early 1995. “The fact that I had access to these bright students helped me launch my programme,” he says.
4) Setting up business: In June 1995, Narayanan quit Ranbaxy and formally launched Career Launcher. “All along, my parents let me take my decisions. But this time, they were apprehensive,” says Narayanan, who had savings of Rs 17,000.
Since classes were held in various colleges in Delhi, Narayanan spent just Rs 650 to buy four chairs and a table for a small office at home. “My students were my advertisement.
| Tips for starting out | |
| Minimum investment | Not much, if you have space to hold classes |
| Skills required | Knowledge of the domain |
| Break-even period | Immediate, if your initial investment in the infrastructure and staff is not high |
| Attitude | Enjoy teaching and interacting with students |
| Bottomline | Constantly update course contents and be aware of the trend |
By the next year, I became a familiar face in Delhi colleges, as I often counselled free of charge,” he adds. Narayanan earned Rs 9,600 from the first batch. As the next step, he took the mock test concept to other cities.
Around the same time, his friend from IIM, Gautum Puri, also joined. “I couldn’t pay him a fancy salary but offered him part of the business,” he says. “We earned Rs 4 lakh that year,” he adds. In 1997, another friend, R Shiva Kumar, joined the company. The team decided to expand the business by creating a complete CAT programme and hired premises to hold formal classes.
5) Expanding scale: Being cash positive every month was one of their biggest advantages. “Capital has to be deployed very effectively,” believes Narayanan. He also realised that he had to invest in his team.
“Over 100 employees of the company have employee stock options,” he adds. To expand the business, Narayanan took the franchising route with a unique twist.
To ensure quality control, he would only partner a teacher, who was competent enough to take some classes. “An entrepreneur is the best guy to trust your business with. He has the urge to succeed and when he grows, you grow,” says Narayanan.
“We made mistakes. Especially when we did not price our programmes right,” he says. Even with franchises, it was word-of-mouth publicity that helped the company grow. Career Launcher soon added entrance tests for engineering, law, computer applications and fashion institutes to its range of programmes. “We have a special team which develops and upgrades the course contents,” says Narayanan, who has a 30% stake in the company.
6) Getting funded: Though the company’s turnover was growing by 50% every year, Narayanan felt they were stagnating. “We did not want to remain a test-prep company forever,” he says.
In 2005, the team decided to enter the education mainstream. The company will soon be launching job-oriented courses for retail and insurance. It has already set up Nalanda Foundation (NF), an educational society, under which it has set up branches of Indus World School in Hyderabad and Indore, as well as a play school in Noida.
“We plan to set up 250 schools in 10 years,” says Narayanan. The company also has plans to come up with a B-school near Delhi. “The boom is just starting. There is a whole world of opportunity waiting to be tapped,” he adds.
Gaja Capital, an India-focused private equity firm, invested about Rs 35 crore in Career Launcher last year. With 80,000 students, 99 centres and turnover that is touching Rs 100 crore, Narayanan is now looking to set up centres across Asia.
