There are business opportunities everywhere with education. The biggest weakness of the Indian education system is that it encourages rote-learning. Students don’t translate what they learn in the classroom into real life. MBAs for instance, are taught to see and exploit business opportunities. But very few B-school graduates jump from the safety of a white-collar job into the uncertainties of entrepreneurship.
In 1988, Shantanu Prakash was the odd one out in his batch at the Indian Institute of Management, Ahmedabad (IIM-A). The 23-year-old from a middleclass Delhi family was one of the few who refused to opt for campus placement.
He has no regrets: “I deferred my placement hoping to succeed in a venture closer to my heart; something that enabled technology and education. And I am grateful that I didn't have to return, looking for a job.”
Armed with his MBA, Prakash found his business niche in education itself. As the CEO of Educomp Solutions, (a word combining “education” and “computers”), he now presides over a company which registered Rs 54 crore in 2005-6 revenues. Educomp’s revenues are growing at over 60% a year; it has 10 offices, a fully owned US subsidiary and more than 1,300 employees.
The business can be described as the creation, management and delivery of content for school education. Educomp's solutions cover the gamut from multimediabased curriculum content to teacher training, custom content in regional languages, education portals, elearning and IT infrastructure. “Education is one IT territory where the demand is immense and so is the potential to expand,” says Prakash.
It's been a long journey from the educational venture he was part of in 1988. For several years, he was taking home the princely sum of Rs 5,000. But Prakash stuck it out until his first big break. “I was excited about the immense opportunities in bridging the technology gap with teaching and teaching aids. And, I found that I was learning more with each passing year,” he explains.
In 1994, Educomp was incorporated after Prakash borrowed Rs 50,000 from his father as seed capital to set up computer laboratories in schools. “In 1994, computers were just making an entry into schools. I decided to target the IT space within the school education system,” he says.
Prakash adopted the build, operate & transfer (BOT) model which later become so popular in road-building projects. The first client was Carmel Convent, Gwalior. “Computers then were expensive and not widely used,” he recalls.
The Carmel Convent management accepted Educomp's proposal only after he committed the initial investment. “I proposed that students should just pay a nominal monthly charge for the services. The idea clicked and it boosted my confidence,” he adds.
That set the template. Prakash started approaching schools with an offer to set up a computer system and provide content. Students would pay a monthly fee.
Educomp had to make large initial investments and survive on the cash flows from the fees. “I thought every school would be interested in this concept, and indeed, most were. We did have problems, but at no stage did I feel it was not worth the effort,” he says.
Educomp’s Smart Class model enables teachers to use animated content in the classroom. Educomp develops digital content as per the curriculum and also offers teachers’ training programmes. It has also started exploring the online tutorial business. “We now cater to the K-12 (kindergarten to class 12) market,” Prakash says.
The breakthrough came in 2000 when Educomp did Rs 3.63 crore of business and received around $2.5 million in venture funding. “The much needed cash to grow the business came. We did an additional Rs 30 crore business over the next two or three years,” adds Prakash.
Revenues, growing at 60% per annum, egged Prakash on. Today Educomp is focussed on hitting $1 billion turnover by 2010. In end- 2005, it raised Rs 50 crore in a public issue where Prakash sold about 25% stake.
Educomp is organised into four divisions. “Smart Class” develops animated instructor-led content as teacher aids. “ICT Solutions” is an education infrastructure and digital content play that bridges the digital gap. “Professional Development” is a technology-aided learning workshop for teachers and “Studentcentred Initiatives” include e-tutoring, mathguru.com and other retail educational tools.
A new line of business is teaching English-language skills to East Asia. “It is a fast-emerging and profitable business,” says Prakash. “There are opportunities everywhere with education. The world over, parents have a problem helping their kids with studies. If they can go to their computer for help, it’s a huge relief,” he says.
The US presidential initiative of “No child left behind” (NCLB) has driven growth in an US e-tutoring market that is pegged at $3 billion. “Our mathguru.com venture has interested many kids who seem to find it more convenient than teacher-aided math tuition,” adds Prakash.
Many school-going kids have Educomp to thank for having replaced the blackboard with more interesting tools such as video clips, graphics and animated content. For teachers too, it has been a learning experience. Who knows? A new style of teaching may inspire more kids to apply the lessons they learnt—just as Prakash did so many years ago.