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Why I Took My EdTech Company Public | Satya Narayanan R (CL Educate)
135 Plays4 years ago
"I am the most qualified guy to write about the failures of CL, nobody knows it."
This powerful statement from Satya Narayanan R encapsulates a key takeaway from the episode: true entrepreneurial wisdom comes not just from success, but from deeply understanding and learning from the inevitable failures along the way. It speaks to the vulnerability and resilience required to build something lasting.
Satya Narayanan R is the founder and chairman of CL Educate, one of India's original EdTech companies, launched in 1995. An alumnus of St. Stephen's College and IIM Bangalore, Satya has been an entrepreneur and teacher for nearly 30 years. He grew Career Launcher from an idea into a listed company that now employs over 1,000 people and serves lakhs of students across 150 locations in 10 countries.
Key Insights from the Conversation:
- The Drive from Discomfort: Feeling restless in a stable corporate job fueled Satya's search for a more meaningful path, leading him to entrepreneurship.
- Lessons from the Field: His extensive experience playing competitive cricket significantly shaped his discipline, strategic thinking, and approach to teamwork in business.
- Building for the Long Haul: Satya advocates for building sustainable, profitable businesses focused on institutionalization and long-term (100-year) value creation, rather than solely chasing valuations.
- Adaptive Leadership: He employs a situational leadership model ('Tell, Sell, Consult, Delegate') based on the competence and maturity of his team members.
- Embracing Change: Satya sees forced experiments like remote work as opportunities to rethink business structures, cut inefficiencies, and reinvest in core value.
Chapters:
- 0:00:48 - Humble Beginnings & EdTech Vision
- 0:02:08 - Early Life & Overcoming Shyness
- 0:07:40 - Growing Up & The Cricketing Dream
- 0:13:43 - Cricket vs. Academics: A Choice
- 0:18:21 - IIM Bangalore: Transformation & Reality Check
- 0:21:25 - First Corporate Role at Ranbaxy
- 0:27:23 - The Entrepreneurial Spark: Founding Career Launcher
- 0:33:24 - Scaling CL: Early Growth & Team Building
- 0:36:25 - Diversification & Challenges: Indus World School & US Market
- 0:43:57 - Leadership Style: Tell, Sell, Consult, Delegate
- 0:45:52 - Adapting Post-COVID: The Future of Work
- 0:50:05 - The Journey to IPO: Rationale & Lessons
- 0:54:00 - Vision: Building a Legacy Beyond Valuation
Hashtags:
#FounderThesis #SatyaNarayananR #CLEducate #CareerLauncher #EdTechIndia #IndianStartups #Entrepreneurship #IIMBangalore #StStephens #StartupJourney #Bootstrapping #IndianEntrepreneur #LeadershipLessons #BusinessStrategy #Education #TestPrep #IPOIndia #Podcast #MakeInIndia #StartupIndia #BuildToLast #FailureIsLearning
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Transcript
Introduction to Founder Thesis Podcast
00:00:02
Speaker
H T Smartcast You are listening to an H T Smartcast original
00:00:24
Speaker
Hi, I'm Akshay. Hi, this is Aurob and you are listening to the Founder Thesis Podcast. We meet some of the most celebrated sort of founders in the country. And we want to learn how to build a unicorn.
00:00:42
Speaker
I would reduce my mistakes from 70% to 50%. I would have become an Infosys. If I reduced 25% I would be a Microsoft. I am the more qualified guy to write about the failures of CL. Nobody knows it.
Satya's Early Life and Career Launcher Founding
00:01:02
Speaker
Imagine coming from a family where your father would drop you to school on his cycle, where you had no TV at home but had a deep love for cricket. Would you believe me if I told you that the story is true? And a young man went on to become the founder of the original Ethic Company of India.
00:01:20
Speaker
Satya Narayanan, founder of CL educate started with the very first Career Launcher Center way back in 1995. And his story is also the story of India's rise from poverty to being an economic superpower.
00:01:36
Speaker
today, CL educate's team is more than 1000 employees strong serving lakhs of learners in 150 locations across 10 countries. In this candid conversation with Akshay, Satya talks about his love for cricket and how that shaped him as an entrepreneur. How he scaled up career launcher and took it to IPO and there's loads of wisdom and insight that he shares from his 25 years of experience as an entrepreneur.
00:02:05
Speaker
and don't forget to subscribe to the show through htsmartcast.com, Apple, Spotify or wherever you get podcasts.
Influence of Cricket and Overcoming Shyness
00:02:21
Speaker
My full name is Satya Narayanan R. I come from Palakkad and the R stands for my father's name, Ramakrishnan. So that's quite a mouthful for a visa officer. It takes a few minutes to read it when I land in the U.S. In short, I'm called Satya. I come from a family of three brothers and a sister. Father used to work in the posts in telegraphs department. Mother was a homemaker, born in Bangalore, had my early childhood in Hyderabad before we shifted to Merritt and Delhi.
00:02:50
Speaker
So Satya, you are probably one of the most articulate and intelligent people that I have known in my life. So is that something you inherited genetically? You know, the truth is that I never ever opened my mouth. I don't think even one. In my entire academic career, I was so diffident and so shy to the point where, as you know, in a business school, in order to
00:03:14
Speaker
make people to speak and communicate. There is also marks granted to what is called as class participation. And some of the professors at CP as 10%, 15%, 20% and all. I would have got a zero in every single CP score. And the joke at IAMB used to be, BCP is before class participation. You know faculty, after class participation.
00:03:41
Speaker
And the funniest thing of it is that when I started Career Launcher, I did not have the confidence that I can take a class. So I did all the dhammasuri, you know, the sales, the poster, the counseling, the cash, taking the enrollment. And when I had a batch of 34 students, I lined up three of my friends to come and take the first lecture. I think Career Launcher has been more of a launcher for me. I've learned
00:04:06
Speaker
little bit of speaking after the age of 25 when I started career law.
Cultural Anecdotes and Family Background
00:04:10
Speaker
So how was it growing up in Meerut? I mean you probably did not know Hindi when you moved to Meerut. What was that move like? First 13 years was in Hyderabad. So I've studied with Telugu as the first language while the mother tongue of home is Tamil and the Hindi that we would have in Hyderabad is the Hyderabad Hindi and that too we had only heard we would not speak
00:04:31
Speaker
And you know, that was an era, it might sound extremely funny. Name any five South Indian names actually. I'm digressing in the interest of a little bit of fun and interactivity. I'm again naming friends that I know. Srinivasan Satya, of course, is there. Narayan Murthy, again, big famous name. I don't know. Is Nikhil Nandan Kani also South Indian? Must be. Yeah, absolutely. Nandan Nandan Nilakani.
00:04:55
Speaker
So even in 2020, when you are thinking of South Indian names, each of those five names were of Hindu gods, Srinivasan, Sakhyanarayanan, Rajagopalan, Narayanobi, Venkateswaran, Sudhakaran, all of those are Sanskrit names of Hindu gods and goddesses. And when I was 10, 11, 12, any other name which was not of a god, either it meant it's a Christian name or a Muslim name or something like that.
00:05:23
Speaker
Sunil, Sunil Gavaskar. I thought Sunil was a Christian. Dilip Vengtharkar. I thought Dilip was a Christian because he is not Chandra Shekhar. So that's the context and a very funny anecdote is once I went to my mother to seek permission to go and watch a movie on television. I was always a negotiator on behalf of my siblings.
00:05:42
Speaker
I remember going to my mother to negotiate when she was in a good mood on a Saturday afternoon.
00:05:58
Speaker
I went to my mother and asked her permission to allow us to watch this movie called, and my mother gave me a sound crashing, saying that now you also want to go and watch Muslim movies. Long later I realized, had nothing to do with Muslim. I came to merit.
00:06:22
Speaker
And class 8th, my Hindi textbook had a lesson called Saneema. It was an 8th sentence lesson. Raju or Ramese Seneema Gaey. Rolok Seneema Deke. Seneema Kotha Chha Laga. Gar Aye. Kana Kaey. Sog Aye. That was a Chapi Naija part. And then the question would say.
00:06:55
Speaker
Now, this is till May 1983. June 1983, 30 years later, I am in Kendri with the six clients in Merritt Kent.
00:07:04
Speaker
And then the Hindi, since we were talking about Hindi, the non-detail Hindi. Non-detail was a novel.
00:07:25
Speaker
And I look at them as if I'm watching a tennis match between Djokovic and Roger Federer. Every sentence would have three new words I've never heard in my life.
00:07:42
Speaker
What's the deep end induction of mine into Hindi? Hyderabad to merit was from Hindi non-land to Hindi deep land. So it was not even Delhi. You grew up in a lower middle class family, I believe. What was that like? And I believe cricket had a big part to play in your childhood. So when did that passion for cricket start?
00:08:04
Speaker
Radio commentary, Zamanatha, Kapil Dev and Sunil Gaksar were the pride of the country. Before that your question about the family? Yes, it was a lower-middle-class family. My father would bicycle to his office in Hyderabad, maybe 8-10 km. Three boys and a girl to feed at home. Took a 5000 rupee apartmental loan to build a house. Can you imagine that? Hyderabad in 1972 took a departmental loan of 5000 rupees.
00:08:33
Speaker
A few years later, he enhanced it to about 21,000 rupees. That was his house building loan. We did not have a radio, television, dining table, refrigerator. All of this I bought for my home after my IMB and after my job in 1993 and later.
00:08:54
Speaker
to a different era the pride was how are your kids doing and not what is the material possession of your home or at least my parents chose to stay in that kind of a mindset and ecosystem and my parents continue to live their life that they know very simple they continue to be role models for me my father and mother now speak in Sanskrit at home so
00:09:17
Speaker
You know, they've been lifelong learners. After they retired, they went back and did their masters in Sanskrit remotely from the Ganesha University Tirupati. And now, both of them, they teach Sanskrit free of cost to youth through their affiliation with an organization called the Samskrita Bharati.
00:09:32
Speaker
So somewhere I can see the roots of your becoming an education entrepreneur coming from your parents. I mean, one thing of course is that most entrepreneurs are relentless learning machines, you know, and probably that is something which you would have imbibed from your parents.
00:09:48
Speaker
Yes, yes. In fact, my grandfather, my father's father, was a bakayada teacher until he retired. And even my father, he spent a lot of his time in the posts and telegraphs department. Stink that he did, he would be affiliated with the telegraph training institutes in various parts of the country. It goes all the way up to our genetic code of the Ayers from Palakkad, Kerala.
Education and Shift from Sports to Academics
00:10:27
Speaker
that translates into professional, consultant, software, charted accountant,
00:10:43
Speaker
So, when did you get serious about cricket as a possible path for you to take? You know, in 85 in Merritt, during the summer holidays, there was a small piece of article that came in the Hindu edition or was it Times of India? I don't know. It was like a 30-word article on the sports page called Bedi to coach.
00:11:03
Speaker
And I and my brother and one or two friends in our colony used to go to the cricket stadium and merit and play regularly. It used to be like pilgrimage types. And how old were you?
00:11:24
Speaker
I was 13-14, so we came to that thing and selection trials happened at national stadium. Maybe 1,000-1,500 children from whom they had to choose 30 each in the under 15 and under 19.
00:11:39
Speaker
So I joined the under 15 trials and my brother joined the under 15 trials. Fortunately I got picked up among the 30 kids in the under 15. It was a 45 day camp to happen in Delhi and then we stayed at an uncle's place and we would go this was somewhere near Kasturba Dandimar and we would walk down to the national stadium. At the end of that camp I got
00:12:00
Speaker
the best trainee and this and that. Then Bishan Bedi called my father and persuaded him that I think he can click. Why don't you shift him to a school in Delhi? My father and boss said, He is guy who has dedicated his life. Those things are not known usually in the media. He would do this to half a dozen kids every year. So he said,
00:12:27
Speaker
We used to live in that uncle's home, I and my brother and then I used to go to national stadium and then that's when I started playing for under 15, the 70, all of that.
00:12:49
Speaker
But why did you drop? Did it increase your chances of getting selected if you were in school or what was the reason?
00:12:59
Speaker
See, there used to be a bit of change here. The Under-17 tournament was called the J-Hazare Trophy and Under-10 is called Puj Baha. So, I was still eligible to play one more year of Under-17. You have to be Under-17 and you should still be in school. My friends are still in that WhatsApp group of that Matajiya called Public School. They haven't recovered from that shock.
00:13:29
Speaker
In the evening, they were all frantically looking in the non-mobile and even landline phones were not there in anybody's house. All our neighbors asked, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please, please,
00:13:57
Speaker
See cricket was primary as I said from 85 to 91. If you actually look at the careers, this is the way I looked. It's not necessarily the only way to look at it. You know, you get a very good sense of is your career taking off or not. For example, 85 to 87, 88, the rise was meteoric. I was aware of the gradient that I was traversing.
00:14:19
Speaker
to the extent where I have played cricket with practically any name that you can mention in the data. Maninder Singh Kapil Dev, Nojo Singh Sidhu, Chetan Sharma, Manoj Prabhakar and we used to ball to them in the nets. Indian team would have to practice, play local tournaments in teams that are captained by Kapil Dev or Sidhu or somebody and they would know you, they would know this.
00:14:38
Speaker
16-year-old, Bedi Pajika, Shagir, Podi H. Lixpin, Superfielder, those kind of relations travelled very, very quickly. As I reached 88, 89, that one was plateauing very, very fast. And ideally, whether you take a prodigy like Sachin or you take a very conventional who has grown over a period of time, Rahul Dravid, you have to arrive on the horizon by the time you finish your college. I had not arrived at the India horizon. I was still regional when I was getting out of Stevens.
00:15:08
Speaker
and I would have been in the top 200 and not in the top 20, top 40. Which means I would have to make a choice and a whole lot of people they do that. But I said that, and I also grew up one in the family, one it is my own wiring and one wish always never neglect your studies. Cricket happening in India till today in the history of cricket. There are 350 people approximately who have played test cricket. So you know probability.
00:15:36
Speaker
And I would have easily continued and played Ranjit Rafi for half a dozen years, 10 years maybe, and become a, in the later era, commentator. But to me, that was not very exciting. I've always been a little guy who doesn't make the choice happen to him. I must make the choice.
00:15:57
Speaker
The school that I went to eventually Akshay, it was a school called A.V. Jangkura. I wanted to get into a school where cricket was religion. I wanted to get into a school where cricket was religion. I wanted to get into a school where cricket was religion. I wanted to get into a school where cricket was religion.
00:16:25
Speaker
But after Steven's crack, what was the time like? Because I'm sure Steven's cut-off was time to be competitive, right? Yeah, competitive, or my sports coach, I mean, PCM is 91% high. Was it because you were a gifted student? Yeah, you put in time to study.
00:16:42
Speaker
I've always put in time. At the same time, you know, maybe this need for excellence, you call it or whatever, work hard is a congenital disease for me. I never show up for anything without my homework. Homework in an exam for me means my mathematics may 100 attempt Karunga, or my pita ji ko muchko explain karna par tatakim hai seer 97 kyo hai.
00:17:03
Speaker
So I cracked through my board results which at that time cut off for 85 or something I got a 90 or 91, 90.33 who was all subjects and 91 something in PCM and with my percentage with my cricket background asking for B.Sc. general. My school was very proud that when I was in college, when I was in North Campus, when I was in Stevens, when I was in Mahal, when I was in Stevens,
00:17:39
Speaker
If you are in the top 30 of Delhi in that era, you know, this is true for Delhi then then you can walk into any Ranji team in any part of the country.
00:17:55
Speaker
So, you were clear that IAM Bangalore region because of Karnataka team. Fortunately, among the IAMs, there are no IAMs. If they convert to IAMs, they will be miraculous. But in Bangalore, IAMs, NID, FMS etc.
00:18:11
Speaker
because it was an IAM and Bangalore there is no doubt and also was a great team so I requested Bish and Bish spoke to Gundappa Vishwanath and and I went and I started playing cricket the next day in KSC after I reached Bangalore and what I carried with me from Delhi to Bangalore in the Karnataka Express 40-hour journey was just my cricket kit bag with shorts and t-shirts and
00:18:34
Speaker
But at the end of the first term in IMB, I got two Ds. And as you know, if you get three Ds in first year, you are retained. If you get four Ds, you are thrown out. And first term is only six out of the 18 subjects of the year. So, I would have accumulated six Ds. So, I promptly said to the boss, from a professional cricket stream, I would have accumulated six Ds.
00:18:58
Speaker
I designed myself to a life of a cricket lover and created an organization called Federation of Failed Cricketers of India who is my
IIM Bangalore Experience and Ranbaxy Reflections
00:19:11
Speaker
founder chairman. So was that I Am Bangalore experience transformational? Like typically for most residential two-year programs are like transformational for people who go through those programs.
00:19:21
Speaker
Was it the same for you? I would have been a nobody without IMB. I'm deeply grateful to faculty both inspirational but it is very cutthroat. What is more emotional intelligence you see there? How to excel at the expense of your friends you learn there and it is nothing to do with IMB. See think of the contrast where the academic system is set up saying that you have to sell the bottom 20% of the batch only 15% of the batch.
00:19:47
Speaker
must get A grade and contrast it with cricket where you put the purpose of the team ahead of yourself. So the value mismatch was humongous and I literally struggled and I reached a point very quickly at the end of first term that this is a place where it's a rat race and at my best also I cannot win this rat race.
00:20:05
Speaker
it's just impossible because guys were so brilliant you know in my academic career ever I've never been number two or number three I've always stopped and not because of anything just because I would I could put away the cricket kit and study for 60 days and crack the exam but inherently I was not a
00:20:21
Speaker
Deeply in love with physics or chemistry or something. I would do it because I have to crack the exam. Whereas I am bad luck. I was in the bottom 15 of the batch because it just didn't look like I will want to compromise or give up anything in order to be a topper here. Number one. Number two is that succeeding here on the yardsticks that these guys are measuring has nothing to do with the life after this.
00:20:50
Speaker
I did not think it had anything to do from the real life that I came from. So I think from that point of view, IMB was a little bit of a disappointment. It has gone to dogs now. They have stagnated. They have not reinvented themselves. So it's another story. So coming back to your question, yeah, I think a couple of professors were truly inspirational. I continue to be in touch with them.
00:21:15
Speaker
Friends have been for lifelong, there's no doubt of them are extremely brilliant, people doing extremely well for themselves. But the template of education there I hugely have disdained for and I merely was biding my time to get out to bus. So you got list at Ranbaxy. Did Ranbaxy not have gut off of grades and all that?
00:21:40
Speaker
No, actually Ranbax was an abstract company. That time it was like 150-200 crore company and then beginning to internationalize Indian Pharma industry was going through and it had a new management in that son Dr. Parvinder Singh. He had done his PhD in pharmacology or something in the US and come back. The CEO was a gentleman called Braar. He was also a young gun at that point in time. FMS batch, 12-15 years senior. So for them, it was a bio data for them to go and recruit from an IAM.
00:22:07
Speaker
I chose to come to Ranbaxy. It was a big tick mark in their bio data. In my batch, the management training batch of Ranbaxy was about 24-25 people and the Ranbaxy management training program was a 8-9 month program. We were treated like royalty. I opted to be in India sales but as a first job they gave me India product management. I was handling a couple of molecules, a couple of drug brands.
00:22:29
Speaker
So what does product management mean for a pharma company? I mean, I understand product management for tech companies, but what is it like for a pharma company? So product management for tech company in some sense has been the adaptation of a similar idea from an FMCG or pharma. So, for example, both Glaxo and Ranbaxy and Pfizer would have the same salt to treat, let's say, a respiratory tract infection.
00:22:56
Speaker
With the whole salt, you can see the same thing. You can see the generic product. You can see the branded product. You can see the augmentation value. You can see the position. You can see the pricing. All of those four or five layers where a generic need which can be met by a generic product is addressed by you in a branded way. That's your job. See, very similar to there is a coconut oil from
00:23:18
Speaker
HUL, coconut oil parachute from Mariko. There's another coconut oil from ITC. But these three are coconut oil. All of the augmentation that you do, you do it as a for a pharma product. So I used to handle a particular new generation anti-ulcerant drug. The brand was called xanosin. The generic was ofloxacin was the salt. And we used to compete with Glaxo on one hand and Pfizer on the other hand.
00:23:46
Speaker
So that was the product management. Of course, I would report to the general manager marketing who would have three or four brand managers like me, each one handling two or three brands. So you can call it product management or you can call it brand management. So that sounds like a pretty interesting kind of work, a lot of ownership.
Founding Career Launcher and Early Challenges
00:24:02
Speaker
So, you know, what made you decide that you don't want to continue?
00:24:05
Speaker
I think Ranbaxy was a very entrepreneurial place because you know this company was breaking out and when you're breaking out you are short on talent and when you're short on talent and the opportunity is big in the marketplace the leadership also realizes that you know youngsters should be given or they have no option but to give a lot of space and even my boss was like that as long as you don't goof up you go and do whatever you want however in spite of all of these somewhere I was growing rest
00:24:31
Speaker
And that is because I think it does not take much to tick the box and be a topper in the corporate sector, I realize. And whatever you do, at least this is for me. In my head, I was not answering the question, what is life except for you?
00:24:47
Speaker
So the problem was not with Ranbaxy and then I did go out and did one specific interview. What is the problem that I have with Ranbaxy which this company will solve?
00:25:06
Speaker
I still have a relationship with him. Both his children, now I'm saying, both his children have been schooled in some career lunches. I would sleep at his home. It is either ran back or you do something on your own.
00:25:31
Speaker
So that was the beginning of my thinking. And then the internal journey started. Was it like you were reading books about entrepreneurs and you thought that you were an entrepreneur? Because 95% of people would have been happy in the situation in which you were. So what was that internal process because of which you were not happy?
00:25:56
Speaker
Entrepreneur would be happy at myself. My stellar day would draw out only 20 and in a great company. I am a deceased hard worker. We used to live in a gold market and ran back to office.
00:26:20
Speaker
So, I had to go to the gold market, the gold market, 6-7, and the Peshwa Road Apartments. But the Peshwa Road is a narrow place, but the cycle is not there. So, I used to do perhaps 100 days. You know, as a cricketer, I've never in my life had to work hard to sleep. Now, suddenly for the first time in my life, I did not know what to do between 2 and 7 in the afternoon. Because from 1984 till 1993, when I joined Ranbaxy, at 2 o'clock, I would be at the ground.
00:26:59
Speaker
It was the unexpressed me that was boiling deep within and it was getting very restless and the world could not have asked to cater to
00:27:12
Speaker
my needs, my problems. I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had to tell myself, I had
00:27:36
Speaker
For example, I did seriously contemplate getting back to cricket to coach. But this is like the era of before National Cricket Academy of India. But I think that is the time when this exploration internally was happening. I think that DNA played a role, bit of self-awareness played a role. And then I thought that it had something to do with it. But it should not have a PhD. I have been a very lousy student all my life. So I had to find a shortcut.
00:28:00
Speaker
where I can teach, but I'm not going to go and answer an interviewer why I should do a PhD. Then the question moved to the market market. The answer moved to IAM. And then the thought occurred to me somewhere along the line in that organic process. You know, the one big struggle that I went through when I was preparing for IAM was, what is your life?
00:28:25
Speaker
If you want to know more about IAM, you can go to IAM. If you want to know more about IAM, you can go to IAM. If you want to know more about IAM, you can go to IAM. If you want to know more about IAM, you can go to IAM. If you want to know more about IAM, you can go to IAM. If you want to know more about IAM, you can go to IAM. If you want to know more about IAM, you can go to IAM. If you want to know more about IAM, you can go to IAM.
00:28:55
Speaker
When I passed the pass, I didn't know how much I had to pay for it. When I ran back, the salary that I used to get was something like 45-4600. The gross was $5,500. But I didn't know how much I had to pay for it. And when I came back, I had to pay for it. I had to pay for it. I had to pay for it. I had to pay for it. I had to pay for it. I had to pay for it. I had to pay for it. I had to pay for it. I had to pay for it.
00:29:23
Speaker
I had to pay back a little bit to my home. A couple of brothers were still studying. A fridge, a dining table, etc. I had to pay back a little bit to my home. A couple of brothers were still studying. A fridge, a dining table, etc. I had to pay back a little bit to my home. A couple of brothers were still studying. A couple of brothers were still studying. A couple of brothers were still studying. A couple of brothers were still studying. A couple of brothers were still studying. A couple of brothers were still studying. A couple of brothers were still studying. A couple of brothers were still studying. A couple of brothers were still studying. A couple of brothers were still studying. A couple of brothers were still studying. A couple of brothers were still studying. A couple of brothers were still studying. A couple of brothers were still studying. A couple of brothers were still studying. A couple of brothers were still studying. A couple of brothers were still studying. A couple of brothers were still studying. A couple of brothers were still studying. A couple
00:29:51
Speaker
I went to the top 7-8 colleges. I went to the top 7-8 colleges. I went to the top 7-8 colleges.
00:30:06
Speaker
economic society, commerce society. Enrolment is coming. We are going to college tomorrow. We are going to purchase a ticket. We are going to purchase a ticket. We are going to purchase a ticket. We are going to get a ticket. We are going to get a ticket. We are going to get a ticket. We are going to get a ticket. We are going to get a ticket. We are going to get a ticket. We are going to get a ticket. We are going to get a ticket. We are going to get a ticket. We are going to get a ticket. We are going to get a ticket. We are going to get a ticket. We are going to get a ticket. We are going to get a ticket. We are going to get a ticket. We are going to get a ticket. We are going to get a ticket. We are going to get a ticket. We are going to get a ticket. We are going to get a ticket. We are going to get a ticket. We are going to get a ticket. We are going to get
00:30:34
Speaker
So I had 480 students who took one integrated mobcat that was done for entire Delhi and then I generated an integrated scoring sheet and then gave the rankings and at the end of that for the top 20% I gave free counseling. So I would go after my ran back see evening I would go to the hostels. Now for these I pull out my school drop cycles.
00:30:59
Speaker
So, I would selectively use my scooter, put petrol, and I would go, I would stay there till 1.32 in the morning. There will be these nine guys from SRCC in the list of 80. And between mock cat and cat, it would be a four-week period.
00:31:12
Speaker
So before weeks I had done so much of Shramdan that his children are my devotees even today. They are all CXOs now. We just became friends, you know, they were 21, I was 24. Then, after cat was over, I had a lot of trouble with my PDP launch. I had a lot of trouble with it.
00:31:29
Speaker
out of those 80 people from Delhi I reduced it to 480 people who took mokkat from 480 mokkat I focused on 80-85 people the top 20% who's 80 mesa 34 mera co join ke pahela batch of career launcher ever paid 1000 rupees and they joined me much before the cat results when I called it as PDP planned and the word of mouth was so good that when the cat results came out and practically each of these 34 guys had a call so jyotishthani patrata
00:31:56
Speaker
The performance of the car has filtered a high quality peer group here in the top 80. That happens, which is a much more diluted part of the world. When the pyramid grows big, the quality, it's not. So, you will come even in the top. So, all of them got A, B, C, L, XL, A, it's a crack. So, the result of this crash is not just enrollment, it's a PDP crash batch.
00:32:20
Speaker
And I reached the venue. I had a school tie-up near Connaught Place. There I reached at 6.30 and hired 100 students waiting to enroll for a 7th PM batch. So, I had to quickly change the design of that evening session. You know, enroll all of them. One of us sat outside to enroll them, issue receipts. We were expecting 5 or 7 to enroll. We had some 130, 140. I don't remember the figure. Your batch mates were taking the session or you were taking the session?
00:32:46
Speaker
No, my, all my batch mates, friends were all, that was my promise. On my friend's side, I had to promise them, and they also were part of the journey. I would have to muster 8 to 10 faculty members on every weekend.
00:33:09
Speaker
That is how CL took off. And that traction told me that this MVP is a success. And at the end of first year, my revenue was 96,000 rupees. And my salary was 96,000 rupees. So it told me, then I took the plunge in July 1995.
Strategic Growth and Acquisitions in 2000s
00:33:36
Speaker
So that was the starting point of CL. The journey continued. It was a pretty rapid growth. I managed to
00:33:48
Speaker
convince one good friend of mine to join me full-time every year and the company could take the overheads. We are all there in the company event today. Northumburi was the first guy. Shivku was second guy. 98 Srini joined. 98, 99 Nikhil joined. 99 we went to the IAM campuses to recruit. And what was the revenue like for each of these years? Like 96,000 you told me first year. 96,000, 4 lakhs, 12 lakhs, 34 lakhs.
00:34:17
Speaker
80 lakhs, 2 crores, 4 crores. So that would be, I think we were on a roll till about 20 crores, which might have happened in something like 2003 or so. Okay. So that's pretty fast ramp up. And mostly you were hiring only like tier one graduates. Either they were joining you from your batch or you were employing, like going to campus and hiring.
00:34:48
Speaker
As a young company, you started doing acquisitions, which I think would be a little unusual at that time, no? Yeah, pretty unusual and feared. But why did you think it was the way to go?
00:34:59
Speaker
I think it was more of a need is the mother of invention. It took a strategic thinking. It was simple, logical, connecting the two dots. For example, Kits was the number two brand in Bombay, after IMS, for cat coaching. Now, anyone who knows a little bit of Bombay knows that Bombay is not Delhi. Bombay is a country of its own. So, there is a big crack in Bombay. So, there is a big crack in Bombay.
00:35:31
Speaker
That is how kids came to our view and the logic of acquisition was more of an organically felt
00:35:43
Speaker
strategy you know there are two important things that are always necessary to grow the business one is the entrepreneurial fire power bandwidth people who give more even if they are aware that they get less initially who have also have a very nice deep understanding
00:36:01
Speaker
market and customers. So those were the two reasons for us to look at growing through acquisitions. So if you look at our acquisitions, it would have been either to get a greater geographical footprint or an adjacent product, which is in the test prep space, but they already are past what Peter Thiel calls as a zero to one. So our geographical acquisition was a small company called Kits in Bombay in 2001.
00:36:29
Speaker
And our product acquisition was a company called lawentrance.com in the law entrance space in 2003. So in 2005, you had two major events. One was you started Indus World School and the second was you launched in the US. So could you talk about both of these also? Yeah, I think IWS, Indus World School, we started the project in 2005.
00:36:58
Speaker
And 2006, we launched our first two schools. That was a fairly sensational start to the business. We grew to about 11 or 12 schools in the next four or five years. And then we also had in 2008, we also started our business school, called Indus World School of Business. And both of these were greenfield projects. These were not acquisition. What happened was, while they began to grow very well,
00:37:26
Speaker
These were capital guzzling initiatives, quite contrary to the core business which is test prep. And the two could not have been more contrasting, though both of them look like in education. Test prep has no government license, ruling, nothing. It's a free market option.
00:37:43
Speaker
we're at school and college the tail wags the dog so somewhere five years into that project 2011-12 we began to look for an exit from that because lot was changing on this side also and it needed more resources more time more bandwidth us on the other hand was an experiment if we did not see much success and again in order to focus we did not push
00:38:08
Speaker
or pursue the US thing after a couple of years. We stepped back. It's only 10 years later that we have gone back to the US. You had almost 10-11 schools before you decided not to pursue it further. So what changed? I mean, initially there must have been optimism that it's worth investing in it. You know, what caused that optimism to go away?
00:38:31
Speaker
The most important was the entire policy perspective towards school education in India. It changed dramatically between UPA1 and UPA2. In UPA1, the government had announced policies to bring a whole lot of government schools under the PPP, which means what it promised was you could own a thousand schools without owning the land and building. A lot of policies were announced by the finance minister in the budget
00:38:59
Speaker
We got about 15 schools from the Punjab government that were managed by us. So it looked like if you have credibility of running 2, 3, 5, 10 schools, then you can go and become a manager of a large chain of government schools or semi-government schools as an education management expert. And the capital comes from the government and they would compensate you at the rate of, you know, 800 rupees, 1000 rupees per kid per month kind of a thing.
00:39:28
Speaker
All of these are announced as policies and keeping that in mind we ran very hard only to find that there was a dramatic we waited for a year and a half or two we took the decision to give away all those schools that we were running looking back it was a bit of a loss of time energy in the overall story.
00:39:49
Speaker
So I guess this could also have been due to the teachers unions objecting to this kind of privatization and things like that. Was it like a vote bank decision that they decided not to go ahead with it? I think it perhaps was about the clarity and the political will more than anything else.
00:40:07
Speaker
Nobody would stick a neck out and do educational reforms because it's not killing you if you don't reform it doesn't kill you it never catches the attention of the front page of newspapers so it happens when somebody picks it up.
00:40:22
Speaker
and IWSB what was the reason to decide to exit that and I mean there are again lot of allied opportunities for example IMT Ghaziabad despite having one campus has a lot of online courses that they sell and that could have been a like a
00:40:43
Speaker
new business line by itself or like you have Great Lakes has this great learning which again sells like a blended executive education programs. So those opportunities could have been there for IWSP also. So what was the reason to exit that? I think it was the singular focus or the overwhelming reason was
00:41:09
Speaker
to get greater focus into the core business because newer things were emerging in the core business which has two big sweet spots one it is asset light it is capital light second is there is government poking their nose into it if IMT has to do an online program it has to first be approved by a bunch of people that's too dirty and too difficult a game for us to play
00:41:33
Speaker
One thing which I want your view on is how do you think the current breed of entrepreneurs is different from your generation of entrepreneurs?
Evolution of Entrepreneurial Ecosystem
00:41:44
Speaker
How do you see the founders that you talk to today as being different from what you were as a founder?
00:41:50
Speaker
I think entrepreneurship actually is always the resonance between the inside out to the outside in. You can keep the geography as constant. An entrepreneur in Delhi in 1995 and an entrepreneur in Delhi in 2020 and both for a moment assume that both are the same person also.
00:42:08
Speaker
which means you have kept two out of the three variables the same. But the third variable, which is the infrastructure, bandwidth, internet, consumer power, purchasing power, government policies, all of those have changed. For example, now capital is easily available, which is a big difference.
00:42:25
Speaker
entrepreneurial ecosystem, mentors, much easier today. Number two, there is much less risk and shame of failing today to the extent where people have begun to start writing, you know, anything you do, it's a startup. And in some sense, it is good because the moment some youngster turns into an entrepreneur, he is moving your mindset of a creator and not a consumer.
00:42:48
Speaker
You know, there are some people who believe in the jockey and some who believe in the horse, you know, with the jockey being the team which is driving it and the horse being the pace in which it is operating, the business dynamics of it. What is your personal view? Like, do you bet on the jockey or do you bet on the horse?
00:43:07
Speaker
See, both are important. So I think the horse and jockey is a unit. You have a great horse and a poor jockey. It will run well for some time and then go rogue. But a great jockey and a poor horse will go nowhere. It will not even take off. So the ability to pick the horse is also, in my mind, is a representation of the jockey. Because I can't be identifying the horse and the jockey separately. I'll find a jockey who has found a good horse. And if he has taken a bad horse,
00:43:36
Speaker
Which is what people end up defining it right in the charter, saying that we are going to be B2B, we are going to be technology. By using those proxies, you are defining both the donkey and the horse in a very de-ideatized way.
00:43:53
Speaker
So how do you decide, OK, I should spend time looking at hiring, for example, or I should spend time with the finance function to look at whatever projections or whatever. So, you know, from that perspective, I want to understand how you spend your time.
00:44:10
Speaker
Okay, so let me give you one quick and very infallible conceptual framework that has stayed with me. It is called the situation leadership style. Any any person that I work with, I quickly diagnose, where does he fall in the in one of the four quadrants. Now the four quadrants are
00:44:29
Speaker
The x-axis is competence and y-axis is maturity. Maturity means maturity of decision making or maturity of working together. So that can be in an auto mode, that can be in a delegated state. High competence and high maturity.
00:44:46
Speaker
Take the other extreme low competence or early competence and early maturity that will be in a tell mode. I will tell him to go. I will tell him to do that. The second is a cell where I need to sell the idea once I sell the idea. He has competency to execute it and the fourth is consult where it both are in between. So the four options that you need to quickly make is this guy that I'm working with which of the four quadrants he falls in.
00:45:11
Speaker
Is he a tell guy? Is he a sell guy? Is he a consult guy? Is he a delegate guy? So the four or five co-founders of mine, they're all in the delegate mode. I don't have to talk to Suzy or GP or Shivku more than once a month. I have a few people in the mid-range. The fourth is the tell, very young, very young. He's two years into the industry and he's moving into a new role and then you're part of the team. You tell him, tell him, come back and report to me.
00:45:41
Speaker
And then you help him reflect. So this tell, sell, consult, delegate. This is something that I use very, very consciously in my conversations, in my transactions. And I also use it in my conversations with them. You allow me to sell this to you, go ahead and do it and bring it back so that they use it in their transactions with their juniors.
00:46:05
Speaker
So, you know, like demonetization was like a moment for PTM to shine. What do you think will be this moment for like what kind of companies or sectors will really shine because of Covid? Like what are the new opportunities being created?
00:46:22
Speaker
See, the no touch. Can you do the nine yards of your business without touch? That will help you grow. Can you create a work from home as a sustainable model? Because that will take away a whole lot of costs. These are all very domain agnostic.
00:46:47
Speaker
customers propensity to spend the ease with which he is to part with money will be much lesser for the next couple of years which means all products all services will face pricing pressure and with the pricing pressures change it will change your inherent economics of your company how do you do profitable business with less revenue for the same service which means the input costs also have to be looked at you have to really look at
00:47:14
Speaker
Office people marketing technology all these costs have to be looked at and they have to be brought down by 20% 30% 50% So it's going to put pressure on all companies and entrepreneurs to rewire and rearchitecture their business
00:47:33
Speaker
What is your view on flexi-working, work-from-home kind of an office culture? And, you know, some founders very strongly feel that if my team is not coming to office, they're not as productive, whereas others feel that this has shown us a new way to work. You know, where are you on that spectrum? I'm the latter.
00:47:58
Speaker
which is that this was a forced experiment, which what we could not have did. See, a lot of money we are wasting on things which are never taken for granted in one's entrepreneurial journey. When things become established,
00:48:17
Speaker
out of any hundred rupees that is set aside for business we may not realize it 60 70 percent of it in goes towards getting ready to start working it is such a mix of capital that money is going neither to you nor to your employee it's going to a third guy an intermediary now you can put it into into the pocket of just three people you put it into a customer's pocket you put it into your employee's pocket or you put it in your investor's pocket remove all the intermediaries
00:48:44
Speaker
So it is showing us an opportunity to reinvent the core value building elements of your business afresh. And I keep telling myself it would be a pity if we don't make best use of it. And in my head I'm committed to doing it. So I haven't gone to office after I think 17th of March and I'm not allowing people to come.
00:49:03
Speaker
So how do you need to retool the way your company works to make work from home as productive as working from office? Because the way in which a company works from office would be very different because a lot of problems, for example, would get discussed informally. And so all those interactions make things move. How do you retool it so that productivity is there even in a work from home kind of a setup?
00:49:34
Speaker
Actually, the real challenge is Oltar Akshay. The real challenge is actually speaking for myself and the people who report to me, I can very clearly see that not only people have been at their homes, including myself, but I think I'm doing two and a half times the amount of work every day.
00:49:53
Speaker
When I'm horizontal, I'm at home. When I'm vertical, I'm working. We are as good as the outcomes and results. So we have to link it more to the outcomes with of course the discipline and the systems and processes of working. So some of those tools have been discovered, put up and people are feeling in there so that you have a sense of who's doing what.
00:50:18
Speaker
Okay, so what was your expectation behind
Career Launcher's IPO Journey and Future Aspirations
00:50:22
Speaker
the IPO? Like, what were you expecting? And did it pan out the way you expected it to? Like, you know, can you talk about what led up to the decision to do an IPO and the post IPO scenario in terms of what you saw as benefits or, you know, it could be expected or an unexpected benefits or even things which went wrong also?
00:50:43
Speaker
See, the couple of things that were very, very, very clear in my mind, to the best of my wisdom and understanding, that an education business should have a hundred-year perspective and it can have. The technology that it uses, the strategies, the products, the people, the leadership, the chairman, everybody could change. Unlike some other businesses, education is a very long-range business.
00:51:09
Speaker
And in the long range business, if you have to institutionalize it in the modern democratic capitalist world, going to the stock market and listing it out and a million people owning your stock and putting different kinds of balancing pressures on the management is a very healthy thing. It's like a democracy. You are democratizing leadership. You are democratizing value creation. Okay.
00:51:31
Speaker
And as an entrepreneur, I thought that people can climb many milestones by doing a bunch of things. Taking a company post the IPO was a very important milestone in my mind.
00:51:43
Speaker
what perhaps has not gone well. So until the IPO, it has gone extremely well. We had a great IPO. When I say great IPO, it was pricing was good. Great investors came in and the entire journey of the pain challenges that we took, all of those were all worth it. I think what has been challenging has been the post IPO in terms of the investor appetite and a lot of it owes to a few listed companies going belly up because of a very various reasons.
00:52:11
Speaker
So there is this significant bunch of people who sit on this judgment that we still don't have an education company which has built a lasting value for the shareholders. And the case was similar in China until 2007-8, maybe 10. But in China today, there are half a dozen, five billion dollar companies, market cap, which were less than 50 million in market cap seven, eight years ago.
00:52:41
Speaker
Okay. So, yes. So, commentators were never wrong. You have to stay hungry, you have to stay foolish. That's the fundamental attribute of an entrepreneur.
00:53:09
Speaker
If an entrepreneur tries to be wise, he has to quickly become a commentator or a board member. You can either be wise, or you can be foolish, or you can be a commentator, or you can be an entrepreneur. So I'm a player still. I know all the weaknesses. I know I can write a story of just the failures of career launcher. It is better to write it when it's a $2 billion market cap, then people will wrap it up.
00:53:40
Speaker
And IPO is far more difficult than a series B, series D in the private equity market. And build a profitable company which is profitable 24 out of 25 years.
00:53:50
Speaker
But, if I were to reduce my mistakes from 70% to 50%, I would have become an Infosys. If I reduced it 25%, I would be a Microsoft. But, these are best spoken by the Entrepreneur. I am the most qualified guy to write about the failures of CL. Nobody knows it. I know it. So, Bhosari helped me out.
00:54:11
Speaker
Last question, and I don't know if this sounds like an unfair question, but you know, there are companies who came much later and have crossed that unicorn stage. Was it like a conscious choice you made that you want to not chase that kind of size and scale or because you would like in a way the original edtech startup of India?
00:54:32
Speaker
So I think the jury is still out there. There are people who have looked sexier than Amitabh Bachchan in the 70s, who looked sexier than Amitabh Bachchan in the 80s and in the 90s and 2000s, but Amitabh has counted in the last four decades. That's an analogy of an answer, which means what I'm saying is that CL is built to last and I'm not at all for a moment saying that
00:54:57
Speaker
Today, I would not want to be a $2 billion market cap company. That's not what I'm saying. I would want to be a $2 billion market cap company who also is doing profitable business, which is sustainable. But sustainable, profitable, growing is to me more important than the market cap. Market cap can change overnight. One clear path that I have taken, which I have taken very mindfully, is to go and get listed. I believe that, especially in the post-Covid, when people look at the future,
00:55:24
Speaker
And people when they realize what is the amount of capital it takes to build a brand like Air Launcher, that day three investors will come and they'll make a ton of money and a lot of people will come behind them. The answer to your question is the market cap of the company today doesn't represent or value CL, either the brand or the business or the future potential.
00:55:48
Speaker
That's the imperfection of a stock market-led world. So my job is to communicate. I'm not relieving myself of that responsibility. It's also my job to educate investors that this is a great place for people to come and stay invested in for five years. And with very little money, it could look very different in two years' time. But I have always been in favor of a
00:56:11
Speaker
scalable, profitable, highly valuable business. Today we are scalable, we are profitable, we are not as valuable as we should be.
00:56:21
Speaker
But that can happen, you know, the companies that have lasted a hundred years have gone through their phases of discoveries and rediscoveries. But yes, I would love to be remembered as somebody who built a great business, great ethics, lasting value and also lasting stakeholder value. There is always half glass full, half glass empty. We will keep adding drop by drop to it.
00:56:53
Speaker
If you are as inspired by the story as we are by Satya's amazing journey to IPO and beyond, then do consider getting involved with CL Educate by becoming a teacher, a business partner or even a part owner by buying their shares.
00:57:18
Speaker
If you like the Founder Thesis Podcast, then do check out our other shows on subjects like Marketing, Technology, Career Advice, Books and Drama. Visit thepodium.in that is t-h-e-p-o-d-i-u-m.in for a complete list of all our shows. This was an HD Smartcast Original.
00:57:51
Speaker
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