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Pankaj Bansal on Building PeopleStrong into India’s HR Tech Leader
290 Plays1 year ago
From services to SaaS: how Pankaj Bansal scaled PeopleStrong into an APAC-ready HCM and payroll platform, spun out Taggd (RPO), exited Wheebox to ETS, and brought Goldman Sachs in to fuel GCC expansion. If you care about HR tech, payroll compliance, and AI in recruiting, this is a playbook episode.
Pankaj traces the early downturn that forced hard choices, the 2011–12 pivot to cloud HR, and the product-first discipline that turned a services engine into an enterprise HCM OS. We unpack the build–spin-out–exit strategy (Taggd, Wheebox), the Goldman Sachs majority stake and what it unlocks, and why compliance is the new UX in India (DPDP, labour codes). We also dive into AI with Google Cloud, skills graphs, and how CHRO buying has shifted. Come for the founder journey; stay for the crisp lessons on go-to-market, profitability in SaaS, and scaling from India to GCC/APAC.
- Building PeopleStrong’s HR OS: services → SaaS
- Taggd & Wheebox: spin-outs, exits, compounding
- Surviving a downturn, funding, and strategic M&A
- AI in HR: copilots, matching, skills graphs
- GCC expansion playbook: logos, localization, sales motion
- Compliance, DPDP & payroll: why CHROs switch vendors
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Visit founderthesis.com for more founder stories
Chapters:
00:00 – Pankaj Bansal’s Founder Journey
04:30 – Services to SaaS: The Cloud Pivot
12:10 – Building PeopleStrong’s HR OS
19:45 – Taggd & Wheebox: Spin-outs to Exits
27:30 – Funding Rounds & Goldman Sachs Deal
34:50 – AI in HR: Google Cloud & Copilots
42:20 – GCC Expansion: APAC to Middle East
49:40 – Compliance, DPDP & Payroll at Scale
Tags: Pankaj Bansal, PeopleStrong, Taggd, HR tech India, HCM software, payroll SaaS, recruitment process outsourcing, RPO India, AI in HR, CHRO buying trends, GCC expansion, DPDP India, labour codes India, enterprise SaaS India, APAC HR software, Goldman Sachs India deal, ETS Wheebox, founder thesis podcast, India startup stories, scaling SaaS profitability
#FounderThesis #PankajBansal #PeopleStrong #Taggd #HRTech #HCM #Payroll #SaaS #Recruiting #AIinHR #IndiaStartups #APAC #GCC #Compliance #DPDP
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Transcript
Introduction to Pankaj Van Phul
00:00:00
Speaker
Namaste. My name is Pankaj Van Phul. I'm the founder of People Strong and also the commanding partner for Carat Capital and a board member to Kanyogi Barat, which is planned to release sugar for bureaucracy and capacity-weighted.
Pankaj Bansal's Inspirational Journey
00:00:27
Speaker
Conversations with founders who have been building for decades are truly magical. Listening to their journeys feels like listening to the script of an inspirational movie. And this conversation with Pankaj Bansal, the founder of People Strong, has all the elements of an Oscar winner. Pankaj attained the epiphany that led him to become a founder when he was trying to secure admission for his child at a prestigious school. And that was the start of a rollercoaster ride in which he saw the highs of winning business from prestigious clients but also experienced the lows of near-death situations.
00:00:57
Speaker
Today, People Strong competes with some of the biggest global names in HR tech and is one of the best-rated solutions in the market. They are a profitable business with a top line in the hundreds of floors and are on track to put Indian HR tech on the world map.
00:01:27
Speaker
Okay, I'd love to kind of
00:01:31
Speaker
do like a connecting the dots. What led you to be an entrepreneur? Tell me your origin story. I was the HR director at a company called Hill Software, which was a very well-known tech IT brand in the country. And I was 28 years, 27 years. So it was something which was relatively that I had done well. And I was thinking, I've arrived, a little bit of chip on shoulder.
00:01:59
Speaker
kids onto your head kind of a zone and then I was trying to find an admission for my kid and you know learning before that and I took him to a school and and the school teacher it was I will not name it as a very posh school in south of Delhi and you know when I walked in there me and my wife you know they asked me a question that you know did the school particularly have kids of a particular economic
Identity Crisis and Entrepreneurial Drive
00:02:28
Speaker
And I don't know how I felt what they meant, but I felt that I got down from a Sancho car. Most of the cars there were premium cars and I think I don't know where they picked up what they picked up.
00:02:41
Speaker
And I just couldn't reply. I couldn't answer anything. No one had told me. I felt like that day I realized how people with limited means went spoken unfairly how they felt, right? And I just walked out. And I started walking out and my card reached. So my card read, use software and whatever. And immediately that person came out and said, oh, I didn't know your from use.
00:03:05
Speaker
So I said, no, I'm OK. I will find another school for my child. But that day, what I got out was that my identity was that small visiting card. And that was the question which didn't allow me to sleep that night. Is that all who I am? And if I am just worth this card, then it's not worth being here. So that's the point which just nudged me to become an entrepreneur. There it was seen where I had decided that had become an entrepreneur.
00:03:34
Speaker
Okay. As in you didn't want to be HR director, Hugh Soft. You didn't want that as your identity. I was very proud of that company and the role that I played. I found some of the best friends of my life there, but I was not ready to take that as an identity, which I had not realized, but over a period of time, the ego gets onto your head and you start believing the titles given to you by the society as your reality.
00:04:01
Speaker
And I was just reminded that this is not who you are, Pankaj. You can give you multiple titles, but this is a little spiritual side, but it is not who I am. I was very sad. I didn't know who I am, but I knew this I was not.
Early Life and Career Influences
00:04:16
Speaker
Okay. And what's the second event?
00:04:19
Speaker
Second, it was that I took in class never and I picked up arts or humanities. Now it's great people pick up humanities combined into multiple subjects. But in my days in schooling, it was not like that. I'm talking of 1990. India was not even liberalized.
00:04:38
Speaker
just before liberalization and I was picking up arts. Of course, my marks were not good, but I could have got other subjects for sure. But I just picked up arts in my mind, I wanted to be an archaeologist. I don't know why. I always said that either I'll become an entrepreneur or archaeologist because history I loved. And I picked that up and then I realized that how I was outcasted by my friends and society.
00:05:03
Speaker
My friends started easing me over in signs of commerce. The society started labeling me as a loser. My father got very pissed off that whatever I picked up, I couldn't pick up anything else. Other than my mom, no one stood with me. No one. So only my mom stood and she said, you will do well. It's okay. You take whatever you're taking.
00:05:23
Speaker
But you know that feeling all around when your friends start ridiculing you, your neighbors start looking at you like a loser, your father starts questioning that, why are you doing what you're doing? As a young child, you lose your confidence, but thankfully I didn't.
00:05:40
Speaker
But that was the point. Again, in my mind, I said, OK, probably archaeology will not give me that strength. But if I can become an entrepreneur or somebody works, then it will work. So I think that was another important incident in my life which taught me that. I saw on your LinkedIn, you have
00:06:00
Speaker
Let you join the you for your bachelors. And so you're essentially like a Delhi boy. You were born and born in Delhi. Hardcore Delhi boy born and born like that. And what are you up to? Yeah.
00:06:13
Speaker
My parents, like my father, was a government officer and he retired when he launched GST. He had an opportunity that post retirement he became very initial team member of GST when it was rolled out in India. And he enjoyed that project. My mom is a homemaker, but probably she was the one who played a very pivotal role in my life. And that's how I got shaped up, I will say, because of my mom.
00:06:39
Speaker
Okay. And so how was your DU experience like? Which college did you go to? That's the theory. Yeah. So very interesting part is that I was very clear that I wanted to go on entrepreneurship and entrepreneurship was available in two, three colleges. One was just as in very much as I wanted it, but I couldn't get it because I would be girls college. The second is, is a vocational studies college of vocational studies. I couldn't make it to that college. And third was the outside.
00:07:08
Speaker
who offered bachelors of entrepreneurship and small business. So I picked that up, went there. The college was shameless or infamous for its little bit rowdy students. So I got into a rowdy place, though by nature I was not like that, but I sensed both kind of people were existing there. So I realized that aggression is a part of life of you, right? So I learned some hard principle that it got to survive, right? That college taught me a bit of survival.
00:07:37
Speaker
And secondly, I also realized that people who are arrogant are not necessarily bad. It's just one side of that. So I made many friends, which are still my friends, and I stopped judging people. Before that, I used to say, this person is Gondar. That's the word we used to use. And this is bad, that is bad. So I think many of those myths were broken.
00:07:58
Speaker
I saw early shades of politics, college politics. So I had great time, great fun. And of course I got an entrepreneurship stamp because in 1992, most people couldn't pronounce all the names. And they used to write, people used to say, what is this? They couldn't pronounce it. So then the course name was Bachelors in Entrepreneurship and Small Business. So that's how it was. It was fun. I think I was destined to do what I'm doing. How did you end up in nature?
00:08:28
Speaker
So, like I went to arts, which was considered a little outcasted. Once you pick up masters, when I was doing and I picked up HR, again, it was the same thing. People said, either you take finance or marketing, you can't take HR. HR is again for the students who would get the other team.
00:08:43
Speaker
And I remember the director of my institution called me and Dr. Jacob and he said that, you can do better. Why are you taking HR? I said, no, I'm very clear that I want to be here. But I had some fascination for people. And I thought that this is the player I can develop. And I'm so glad that I did. I'm so, so glad that I did. But you have to break the norms. I never wanted to pick up a traditional job.
00:09:08
Speaker
And if you see, I ended up picking up a job with the CEO. First job was with the CEO. Second job I picked up was with the chairman of HATCO. HATCO was a large government infrastructure bank at a very nice place called India Hybrid Center.
00:09:23
Speaker
You know, again, that was a CEO job. HR reporting into the CEO, I was his executive assistant was a fancy thing. And third job when I picked up in Q software, that's when I took up an HR job, truly HR job in an HR function. Otherwise, both previous jobs were directly working with the CEOs, which gave me a very all rounded view of the country, not the sector and my own self.
00:09:47
Speaker
Okay. Okay. And like Hughes would have been that typical hardcore HR like employee engagement and people processes, policies, all of that higher to retire cycle. Yeah. No, actually that company was very special. Probably if I, if I rewind India for the last 30 years.
00:10:06
Speaker
If you pick up all time top 20 workplaces or the contribution of HR, Hughes will definitely figure out. I don't know about today, but I'm referring of that. Hughes doesn't exist in that form and shape anymore. So when I was there, the company was bubbling where HR was in the center. I was just amazed.
00:10:26
Speaker
The CHRO used to talk business language was on the board. Every key decision in the company was happening. I remember there was a fest organized where all techies put up their ideas. We put up an HR idea there and it got an award. So this is the kind of level and importance was given to us. And I was the head of learning.
00:10:44
Speaker
And that was a role which I thoroughly enjoyed. I could work on the human diagnostics. I can say not a physical diagnostic, but the mind diagnostics. I could work on how the competency levels can change. I could figure out the capabilities changeable or not.
00:11:03
Speaker
You know, so it was just fantastic to build up, to be a part where you can define the culture and moves. And most importantly, I remember our customer came, big customer, big project. And out of the last three hours that he spent 45 minutes he spent with us and where I just showed the whole learning journey. So I realized that HR was at the core of your software.
00:11:24
Speaker
And how did this influence your decision to be an entrepreneur? Like, you know, once you had that incident in the school and you decided that you want to be an entrepreneur. So talk to me about what was the thought process. What did you want to launch?
00:11:40
Speaker
So I had no idea what business I wanted to do. But in last one year, when that incident happened, I started searching that I have to do something. I started meeting some friends, started writing business ideas. And that's when I bumped into a group of people who I thought that I can trust. So I said, OK, Pankaj, everybody keeps talking about the idea, but don't go there. If you don't have the right people, you can't make an idea. So idea comes second, people comes first. It may be completely counterintuitive.
00:12:08
Speaker
But it's because of those people I think up. I said, OK, with them, I want to do business. And we got a funding, very small funding from US in a company we chose in our non-HR business. I ran this for 10 months to 12 months. We were building an electronic program guide.
00:12:24
Speaker
And that those 10 months, somebody funded and said, okay, you do it. It was just like my transition to an author more. And three of us were trying to build. And we realized after eight months that the investors pulled out electronic program guide became blah, blah, blah, but never understood the electronic program guide. So now when you go on a TV channel and change a channel, you see the guide. That's it. Yeah.
00:12:47
Speaker
So when it was built for the first time, we were trying to build the first TPG for India. At that time it was cable TV, not even a satellite TV. So we were trying to do. So we were ahead of his time, ahead of the curve, but we just had no idea what will happen near the back end. So anyway, I learned that investor, client and employees, you've got to do all three things together and make sure you have direct access to investors. It's your business. You're not dependent on anyone else. I think that's what I learned from that.
00:13:14
Speaker
So did you wind that up or what happened? Yeah, we had to wind that up. We said, how will we survive? So one person said, I'll run a recruiting company. Another said, I'll go and do consulting. And I said, OK, I'll build people strong.
Startup Struggles and Founding People Strong
00:13:27
Speaker
And three of us shared equity in all the three entities. And we said, we'll go ahead. But I think that's how you start in most naivety. And that's when I had met Shelly in huge days. But that's when Shelly just walked into office. And when I was thinking, I said, hey, how come you're here? She said, I left my job.
00:13:43
Speaker
I said, are you serious? She said, yeah. I said, what are you doing here? She said, you were discussing an idea. I said, yeah, we would. So she said, I've come here to work. And she was carrying a laptop. I still remember it was about 10 to 15 a.m. And I was in Gurgaon building, a place called Supermart, where she just walked in. I just couldn't believe. It was 15 minutes I made. I offered tea. I told her to go back. She said, no, we are starting today. And that's how people started. Wow.
00:14:09
Speaker
I didn't understand why you split the equity of people strong with, I mean, you're essentially each of you going your own separate way, right? The three of you. So I think three of us felt that we have equaled. So very interestingly, one amongst us became a spiritual leader. His name is Sri Anish.
00:14:28
Speaker
And he now runs a spiritual organization. He's a spiritual leader, a long beard. You're a wonderful person doing great things. So that got terminated, you can say, in between. We couldn't really take the journey forward. I wanted him to be in business. And the other partner and I continue to work together. And we separated in 2018. We had work-wise separated earlier, but equity-wise, we separated in 2018. And I call that the only divorce. I hope God will not
00:14:56
Speaker
allow me to see another one, but that was a very painful divorce and nothing to do with equities, but it was just like deep spiritual differences. But I think that's when I parted with him and that's how the journey continued. But he was running a separate recruitment business, separate entity.
00:15:15
Speaker
So the recruiting business guy became a monk, right? And the third person was like a board member helping all of us. Yeah. The consulting helping both of us. He was like a alpha amongst the three of us and we trusted him blindly and we followed. So we had very deep relationship, right? Very deep relationship, much deeper than brothers. It's like soul connect. And that's the journey was happening. So first we had to see Anish parting and then I had to see him parting.
00:15:43
Speaker
So, you know, when people ask, okay, some bit of success you've got, I tell them that you don't know the relationships that I'm standing on, which are buried under. You don't know how many times I've been hurt. You don't know how many times I have goofed up. I'm not using the air forward. You can't imagine how many, how much pain I'm carrying that I have to go through. Sometimes I had to fire people, which I never wanted to.
00:16:09
Speaker
Um, but all this, you stand on that tall mountain and then you, people start clapping for you, but they just see you on the top of the mountain. They don't see what is buried in the mouth. I think that's the most, um, unique part. And I'm enjoying this conversation because in my mind, I'm opening up those layers that I have shut off for a while. Okay. Let's talk about the journey up the mountain. Uh, so you shut down the first electronic programming guide business.
00:16:38
Speaker
You said you will start people strong. Now, did you know what is people strong in your mind when you said you will start people strong? You know, I think Buddha used to say that you can only recognize if you know. So Akshay, if I meet you, I can only recognize if I know Akshay.
00:16:58
Speaker
So, for a load of time, I thought there is nothing unique happening in HR. Only efficiency stop in India happened after the personnel department was introduced by Dr. Uda Parikh and Dr. T. V. R. Lassen in Truro in 80s. Since then, I had seen efficiency growth of HR.
00:17:16
Speaker
But nothing else happened, right? So one question, sorry. This Uday Parekh and T.V. Rawa are icons in the HR space, right? Doc side, that side, that side. So Doc Parekh was my favorite.
00:17:30
Speaker
Yeah, the fathers of HR in India. And Dr. Odaipari, it's a lovely soul. We lost him a few years ago. And you know, what a lovely person. I had a lot of interactions with him. And he set up the first department in Larson and Toubro. And he said, OK, this will be called the personnel department, then OD, then HR, then IR. Many names were given. And that's when the first breed of HR professionals came, until about
00:17:54
Speaker
In early 90s, you will see a similar HR growth or inefficiency happen people were trying to do. Mid-90s is when the new era of HR rose. You remember Dr. Santrop Mishra of Aditya Birla became a case study, Adesh Koulmaidigan was at your software. You know, so many companies started coming up, right? NS Radhana at EY. So many of them started coming up, Dwarka Naat of ClaxoSmith9.
00:18:21
Speaker
So suddenly you saw the rise and HR became a new phase. People can get high well-paid salaries. All these names that I've given, they were getting similar salaries to a CEO. So HR became a new age. That's mid-90s. And I think only in late 2000s where I saw path-breaking shifts in HR.
00:18:41
Speaker
where you can call it innovation. Before that, creativity in India according to meaning meant ad form. If you are an advertisement firm or you are making a film, you are creative. There is nothing else. Business and creativity had no correlation. There was a world called innovation. But I saw creativity at play in late 2000s, mid 2000s, early 2000s where people started.
00:19:05
Speaker
like Sanjeev started nochry.com, right? You saw nochry.com start rising. So those are the models where people felt they're not typical HR, but okay, in HR, you can create wealth. In HR, you can use creativity to change the way people are being operated or worked in corporations. Right. It's at that stage was still seen as a cost function and a way to
00:19:29
Speaker
Like basically the operations management of people was what HR was doing. Like managing payroll, managing who's deployed where and stuff like that. Yeah. So Akshay, I would say the second breed of HR that I sent the 95 onwards, these were the people who were trying to challenge that we are not cost.
00:19:46
Speaker
And they challenged, but they challenged in pockets. Those pockets of excellence gave hope to people that we can become like America where HR was very important. The SAPs and Oracles had become big. But in India, people were still not ready to believe. In mid of 2000s, I think a group of entrepreneurs started rising in HR.
00:20:05
Speaker
who started telling the world, I believe that, OK, India will also claim its stake. And these CHROs who are trying to transform, we are going to become that Intel inside, which will write a success story for them. And that's when the change started happening. It was the CHROs and entrepreneurs that came together to make a difference.
HR Tech Landscape and Innovations
00:20:22
Speaker
Who are the entrepreneurs? You are of course one of them and there is Sanjeev of Sanjeev.com. I think before us Sanjeev, which is more on dot-com side but touching the parts of HR, there was Malfoy which was doing. I think those two are distinctly remember. Other than that the space was completely captured by MNCMs.
00:20:44
Speaker
the Hewitts, the Mercer's, all of them had entered and they were claiming the state that we are the ones, but what they were doing is what was happening in the West, right? So they were bringing those things which is required. I'm not saying it was not required, but the true original Indian thinking was not happening. I think then I saw many of the people moving or jumping to consulting. So I started seeing.
00:21:08
Speaker
And then as we started progressing, we started seeing companies like Quest, which was in workforce. I saw Manish Sabarwal launch in Team Gaze, right? You can say there are faster, better, cheaper models, but still we needed Indian entrepreneurs to claim the skate. Otherwise that market was led by manpower.
00:21:25
Speaker
In technology we came up, along with us, there were many small shoots came up, right? In 2005 and 10, we were not running technology. Akshay, we were just doing shared services. And I realized that was the most fancy thing, so I had to compete with Hewitt at that time. How do I compete with Hewitt? Hewitt was a big brand. Shelly and I thought we'd build because shared services can scale. We did a simple thing, Akshay. We basically read 10K reports. Understand shared services. Can you just define shared services?
00:21:55
Speaker
Yeah, so I'll tell you how it originated. We studied US top 10 publicly HR companies, and we read them 10k reports. And we realized if you have to scale up, either you have to do something recruiting, which we thought Sanjeev was that space, or you'll have to do something in technology, which was in India, no one was talking about. There was no many big players. Or you do something in payroll or shared services, ADP. I remember ADP revenue at that time was almost the same as Reliance. Shelly and I kept counting zeros, and we couldn't believe.
00:22:23
Speaker
We said, how can a company, HR company be same? Not now, but at that time. Right. So I just thought that if there is a possibility, let's pick up this. We can scan. We were very clear. We are not going to build a Lala company. Day one, we'll have board. Day one, we had a cap table. Day one, we'll have money. At that time, angel investment in HR was zero. Zero means zero. Right. So we walked up to the, some of the names that I took earlier.
00:22:46
Speaker
Since they were a path-breaking, forward-looking CHR, I said, can you cut a check? I had the fortune of knowing them. Since I was young at Hughes HR, they knew me. I was part of this body called NHRDN. So I said, why don't you help? And they all cut a small check. I remember Raja Vardarajan of Raman Roy's team, Adesh Goyal, Santrup Mishra, many of them came together and they cut the first check to me. And then NS Rajan came on board. That's how I got my first checks.
00:23:11
Speaker
And that's when we said shared services means if the work is done by three functions, there is a lot of administrative work. We will centralize all that work and a group of people will do far more efficiently in our SLA driven fashion. That was shared services, right? We said we will offer it like that. And we saw US companies going. And to our benefit and luck, we started winning. And when we started winning, the new spread in the market, the consulting firms took note of it. Examples of shared services?
00:23:42
Speaker
So for instance, Microsoft decided to give us a small project, but the name was Microsoft, right? The second project came from Nokia. I remember my friend now Dimal Rath was there who said, okay, I'm going to give you a small project, but they were important shared services projects. And the big brands were thinking, why do I help this small company people from this winning? So we kept winning our hunger help. Nature of projects, like if you can.
00:24:07
Speaker
So somebody said, okay, can you run a payroll for us? Somebody said, can you just manage the employee help desk? The employee help desk was a big thing. It was not existing, right? Can you run an existing thing? Can you run process? Can you manage documents for us? So multiple things like that started coming and we started becoming, and very soon we realized that we are becoming a KPO or knowledge process outsourcing firm.
00:24:28
Speaker
And we said, we never started to become a KPO, right? We don't want to be a part of that industry. We came because we lacked true value. That's the question started bothering us. But in the five years, thankfully, we had built a decent base, raised an angel capital, and there is a family of us from the US who had invested. So we were a legitimate HR, poster child of India at that time in 2005 to 10. One thing in competitions like every company does.
00:24:55
Speaker
Okay. By 2010, what was the size of the business? What headcount? Do you have a new couple of such stats? We were still small, yeah, of course. But we were small, like a 20 crore company or things like that. But at that time, that was a big number. The biggest player in India, the EYs and the PWCs, I remember the largest player was 50 crores.
00:25:19
Speaker
And I used to wonder why the largest pair in India will be 50 crores of revenue, unless it was an empty business, because there was a gross revenue. I'm talking net revenue. But in 2009-10, the market crashed. 8th started in 2009 and we didn't know what to do. So we were almost zero. We called the 35-40 people in the room and we said, guys, we'll have to shut off.
00:25:40
Speaker
We are going nowhere because the projects are getting stored. Everything is going to zero. We'll have to reorg. We have three months of salary left. If you can stay on, stay on, otherwise leave. Out of 34, two left, 32 stayed back. We had expanded our team, got our senior level executives in the company because Shelley and I were questioning that, are we the right leaders? Maybe we were the zero to one founders. We are not one to 10.
00:26:05
Speaker
And that was the biggest London we did because they came from large corporations. And if our revenue was 10 crore, our senior executive salary was five crores. So those kinds of stupid eating mistakes you do all the time, right? And we had the best of the people. And that's when I realized I need to build a board with people of finance.
00:26:24
Speaker
I need to build a world where people have built businesses, right? And not like my friends or people that I trust. That's a very wrong way of building a world. And that's when we revitalize ourselves, let go few people and some people left themselves. And I was about to leave the company. That's the only time I resigned from people's job. And I said, okay, let me go because I'll go and raise capital because we are inside with the deck.
00:26:48
Speaker
But thankfully everyone left and it was left to Shadi and me with one and a half month and everyone took the full and finals also. So we were left with 70, 75 days of money. And that's when the story began again.
00:27:02
Speaker
How many people were left in the end? In the end, we were 35 people, 30-35 people. And all the senior team was shed off. We started doing it again. So immediately we said, okay, we'll start the technology again. People were saying, don't go on technology, it's a waste of money.
00:27:27
Speaker
We started technology again. We had five couple of young people. We got them back. We said, you are great. You are not wrong. Probably people who are managing were wrong. And we just got them back, same nimbleness. And at that time I got a meeting with Mukesh Amani. And I think that helped me jump back. And as luck would have it, I keep saying that there is something happening about that. They are helping us to save. Otherwise I had done everything to screw up.
00:27:52
Speaker
and buying down the business plan. I think God wanted us to succeed. So they kept saying, so probably what did you get?
00:28:00
Speaker
Where did you get it? So I got a call from Jyotendri Thakkar, J.T. as he's known as the CIO of Reliance. Still, he's there. And J.T. called and he said, I want to meet you. And when we went there, he said that we already have the best company on shared services. We want to build an HR shared services. I said, are you serious? I said, so why don't you look at AON and others? Because they said, we spoke to Microsoft. They said, we strongly did it. We spoke to Nokia. They said, you did it.
00:28:24
Speaker
I said, okay, great. So they said, you come meet Mr. Ambani. And I was just looking at his face. I said, meet me. He said, we want to meet. I said, no, he said, yeah. I said, no, I can't meet. I'm not in the frame of mind. He said, are you serious? You are saying not to meet him. I said, no, I want to meet him, but not today.
00:28:39
Speaker
And then he was kind enough. He said, okay, can you come back tomorrow and you meet? I said, okay. Then I called Shelley SOS that come back from Delhi. And she came to Mumbai and told her to wear sweats. And I said, we are a suit because she used to look very young. I was 29 to whatever. And she was like,
00:28:55
Speaker
even younger than me. So I said, you should look old. And then my third colleague and I told him also to wear a jacket and look old as old as we can. We didn't have the color on the hair. Otherwise we were just looking and walked into the meeting and it was a very high part meeting. I will not tell you the details of the meeting, but it was quite a, quite a meeting. Um, uh, two and four was happening where I became a side player very quickly and Shelley took over.
00:29:20
Speaker
and Shelly and then their team were talking and finally the deal was done. And Mr. Mani said that I want Shelly on the project. I said, of course, Shelly on the project. And we got a great shared services project. And we ran that project for two years, built the whole shared services HR of Reliance supported them.
00:29:36
Speaker
And it was wonderful, so lovely to see the way they have grown and leveraged it.
Major Projects and Financial Stability
00:29:40
Speaker
And that gave us the cash. That gave us the market story. Suddenly, all the VCs came back. And in 2010, we got a few offers out of which we picked down Loomis. And Loomis invested in the company in 2010.
00:29:58
Speaker
What was the strategic importance of this project for Reliance? Reliance was outsourcing shared services to people strong, but Reliance got people strong as a consultant to help them set up their shared services. Very good question. So they basically got us like an expert consulting house and they said you design it for us.
00:30:20
Speaker
And even we ran it for them, but deploy your people there. We were not in that business, but the scale of the project was so massive that we had to deploy people there, some of our senior leaders. Shelly used to spend one full day every week in that. And that project had a massive impact. The overall nature was being reorganized.
00:30:36
Speaker
And I think it was their focus at that time, not many companies were implementing shared services. But they implemented, created, and they are conglomerates. So they had so many businesses. So they got all of it together. I remember there was a two feet stack of papers where it had the processes of rechargeable data. Two feet. If you put all the papers, those were the kind of things were created in one year plus. It was a massive project. That's what it did.
00:31:01
Speaker
So having an HR shared service helps a conglomerate be more efficient, be more responsive, be more nimble. What is the benefit of a company that has to do this? Three things people do. One is it brought in huge efficiency. Huge means huge, right? In those days I'm talking about. Second, it gave you predictability and service level agreement.
00:31:24
Speaker
People had started experience BPOs. They said why employees will not get that kind of service. So it was giving them service level agreement when each employee, that was the second group. And third was inefficiency I'm covering not only the number of people, but overall process and speed, but third was the massive cost. Because you're not deploying people just for the sake of it, which led to so many delays and errors. All this was becoming at one place, errors becoming visible. Problem was people didn't know what the problem was.
00:31:54
Speaker
in HR, you just didn't know once you consolidate, then you know, okay, these are the problems. So, efficiency at the same time cost benefits and at the same time service level agreements to each employee. It was a first employee experience shade that India witnessed.
00:32:10
Speaker
Okay. Okay. Understood. Okay. So, this project kind of helped you keep the lights going. Right. Today, you're not a consulting business. You're a technology company. So, how did that transformation happen from consulting? So, you started as a KPO.
00:32:28
Speaker
Then there was a consulting phase. Yeah. This is also the part of KPO, I will say. We were doing still the same thing, right? But you were just designing, right? But I think 11, 12, we started saying we've got to start cloud and we started building cloud when we run into the market, saying that with shirt services, we send cloud. So people, people ask this question. I'm not the name company, very well-known company. And they said, when it rains, how will it work?
00:32:51
Speaker
So I still remember I was just like taken aback. They said, yeah, if you put data on cloud when it will rain, what will happen? I just couldn't answer and I walk out of the room. And then I told my CTO, you know, we are either at a wrong country or in the wrong business. I said, see, I can't hide this battle. I can't educate people the difference between the cloud and the cloud I'm talking about. So I said, best is we put technology for our use and not talking about it.
00:33:19
Speaker
So suddenly we started seeing that, okay, we can be more efficient. So people started becoming more efficient and we started building cloud technology at the backend for our use. Secondly, at that time we started... Give me some examples of what you meant. So for instance, it was running 20,000 people paychecks. I was running on my payroll engine and my HR engine. I was doing transactions. There were better, smarter customers were happier, right? Because people involvement was reducing, dependency was reducing.
00:33:48
Speaker
So for customer, it was efficiency for us. It was innovation. It was the first shade of innovation that we felt right. That's the time we started RPO and we said, okay, now RPO is the time to go because people who don't understand is a recruitment process outsourcing where you are saying that you're not attempting for company. You are not a permanent starting like 8.33% being charged for placements, but you will run the function of hiring for a company.
00:34:15
Speaker
That's called recruiting process outsourcing. We said we will do that. That's the time we started saying that if we run recruiting, if we run HR, then we got to run the assessment, which is pretty high. We said if we do that, we'll become an HR conglomerate, the naivety, right? We were no one and we were trying to be an HR conglomerate. And that's the time we acquired with a little bit of money and equity, et cetera, VBox.
00:34:37
Speaker
So, People Strong became three entities over a period of time. Rebox, Tag, and People Strong. But it was 2014 where we started exposing our HR tech in the market. Now, that's one. Before that, we just never spoke about it. And 2015-16 in true census, so I tell People Strong HR tech is probably a 8-9 year old company, 8-9 year old story. Tag is about a 7 year old story. Rebox is about a 10 year old story. That's how it is.
00:35:06
Speaker
Okay. When you pitched to Loomis, what was the pitch to them? Was it a pitch of a KPO or HR tech business?
00:35:16
Speaker
So when we pitched to Loomis, we had started telling them that we are going to start RPO. We had started discussing those ideas. We said our shared services has picked up. There are big customers. Our name of the customer, Rolodex, was fantastic. We said this is what we are doing, and we'll be the first player. So the exit possibilities for you are the best and highest if you walk in at this time. I think those are the two stories that they walked in. And we did not talk about much tech at that time, but shared services in itself was a very lucrative story at that time.
00:35:43
Speaker
So they came in for these two things, RPO and shared services. Like Hewitt is a global example of... That's right, that's right. So there was a clear precedent that a large business can be... That's right, that's right. So they thought that we'll become the Hewitt of India and we were winning of course more projects than anyone else.
00:36:06
Speaker
Why not continue to do everything? Why are you not doing KPO today? Why are you not the hero of India? Well, can I take a segue in telling you a small answer why I'm saying so, you know, I used to, when I used to lose talent, I used to drive a, draw a two by two. The two by two was one quarter. It was, if you're not good employee and bad at ownership, you're a loser. No one will keep you.
00:36:31
Speaker
Right. But if you're very good employee bad at ownership, you are like 90% of the corporate, you'll work for salary, designation, role, etc, etc. HR will manage you through carrot and stick, right? So you are called a good doer. Doer, right? You're not a loser, you're a doer. But there's a third category, if you're great at employment and great at ownership.
00:36:51
Speaker
then you will be a transformer or a volunteer, you know, like in a guru Dora, when you go the way people serve you that wow, you know, when you see some employees working like that, so they're not employees, they're transformers, they're volunteers, right? Wonderful category. But the fourth category, which I realized, which is underestimated, there's a category where you hire an ownership loan employees.
00:37:13
Speaker
My co-founder Shelly was like that. And this category I used to say they are scientists. They are junior levels. Even Steve Jobs, if you look at, he was not probably the best employee. But ownership was so high, he could tell what is coming next. Shelly could see what customers want. She was that perfect product person. She knew what is coming next.
00:37:34
Speaker
And she used to drive, she was a co-founder, she used to fight with me, and generally I used to lose the fatigue, right? So she used to fight. So in that fourth quadrant, I started realizing that they are the Rajarishis, right? That concept is gone away from our corporate boardrooms. But ideally our board members or these architects of the company should be like Rajarishis and the CEOs or the Rajas or Rani should listen to them. And she said Pankaj shared services is going to be a history.
00:38:02
Speaker
maximum in five years. The future is cloud. So look at workdays rising in US. Everyone is talking about it. Why are we still stuck on the shared services? We have our own cloud. We are building with the first cloud product. No one knows about it.
00:38:15
Speaker
So that's how we started transitioning and we started telling Dormis that we are going to shift commodity and slowly sunset this and rise the technology. That's how we started saying, and we said, we will hive off tagged as a separate business. We will have anyway, have a separate entity called Vbox. That's how it started.
00:38:34
Speaker
Okay. What was the first product within People's Strong that you exposed to the market? And was it a, I mean, you know, there was a legacy way of selling a software, which was you charge a one-time fees and then an annual maintenance contract, or there's like the new way, which is a SaaS subscription model. So how did you launch?
00:38:56
Speaker
Yeah, so Akshay, we were very clear that we will launch only in a SaaS way. The first customer we had was per employee per month. We said there is no way that we will charge for a group. It was a UK-based company who gave us, and they said, OK, we are ready to give up. And we started picking up projects like that. And again, we always believed that there are two ways. Dr. N.S. Rajan, who used to be on our board, used to say that you can start with the easiest customer, like a small company-based company, or you can start with the hardest.
Technological Advancements and Employee Experience
00:39:25
Speaker
So in our previous software, we got Nokia and Microsoft. This time we said, okay, we'll go to the top and gradually we won't say, we want customers who are like best of the best cream of the cream. And once one or two customers start coming, they start talking good about you. Then others are registered. And this is a business where nobody really appreciates you. If something goes wrong, you get a call. If things are right, you won't get a call.
00:39:49
Speaker
So we said we will launch through our app and chatbot. We were the first HR app of the country. We were the first HR chatbot of the country. And that's how we came. What was the product you sold to the UK company? So basically payroll.
00:40:04
Speaker
So initially when we started payroll as a SaaS, we said, okay, we will do that payroll as a SaaS. And then we started seeing we're selling other modules and it started building it up and building it up so well that most of the customers started moving to tech and desktop. And we also discourage them to take services.
00:40:20
Speaker
And it was the hardest transition function. Sounds easy. We had to let go some of my colleagues, which I was telling you, they were great people, but they were just like, they used to go and tell customer everything. Yes. In product, you don't say yes. You tell what you have. In services, you go and say yes. So we had to tell them you can't go and say yes to a customer.
00:40:39
Speaker
So, so letting them go, getting the new breed in and changing the people who are existing that, okay, it will be per employee per month. You can't do these deals. I remember we were again, the first company who charged two to five crore rupees advance. No HR SAS company by that time had signed. We walked up to the customers and tell them, okay, your next four years you give me upfront advance. I'll give you a discount.
00:41:02
Speaker
Right, which is actually a great model, capex model for customers and they loved it. Till date we have many customers who opted and by the way, 100% of the customers who pick up this capex model do very well. This is my thesis because they are also invested in the project. Almost 100% of them are happy customers and they launch projects on time. That's what we witnessed. So that's how. So we launched the commercial model, we launched the first HR chatbot, we launched the first HR app.
00:41:31
Speaker
Okay. There is a saying, right? Which means Lord Shiva finally landed on Kailasa. So I think it was like that movement for us that people strongly finally landed in the HR tech market. So the app and chatbot would be for employees, queries about why is my salary deducted this month or those kind of like typically employs a lot of queries around salaries. Right. Okay.
00:41:59
Speaker
So actually, two parts. One is the app was for the complete employee lifecycle. I can join, I can resign, I can manage my performance, everything, right? And the chatbot was like a new thing. It was not as advanced a bot as we have today. But at that time, it was giving my basic answers.
00:42:14
Speaker
Right? So suddenly the HR volume dropped. We launched even the chat system, which is where people started talking, the email traffic dropped. So all that happened. So it was a wow experience for employees. Till date, People Strong is the best data app in the world, where there are more than 50,000 reviews. We are 4.7.
00:42:34
Speaker
and workdays I think 4.6. So 50,000 plus reviews. So I think that we have carried it forward. We spent obnoxious money, which may not be the right thing on design. We got some of the finest designers to design the app, UIs, et cetera, which is helping us.
00:42:52
Speaker
When did you launch this full service HR product? You started with payroll in 2014. It's 2000 portal and core HRIS as they call it. I think 2015, 16 we started and it's almost eight, nine years where we've been running this whole stack. What is a core HRIS system for people who never dealt with that?
00:43:17
Speaker
Score means all the employee database at one place, the leave time attendance and payroll.
00:43:22
Speaker
Every company, the basic is if employees core, joining, relieving, database, payroll, that is what the core is. Then there are modules on top of it like talent modules where performance is discussed, recruiting is discussed, compensation is discussed. Then there are sections like payroll separately. Then there are sections which are like new-age systems, you're calling them talent operating system, comes into multiple modules. What is a talent operating system?
00:43:51
Speaker
So talent operating system in a way can run on some other HR core as well. So for instance, some customers said that I've read it because I've paid for 10 years. How can people write on top of it? So he said, okay, your most critical is to derive the right performance and a career planning for an employee, which is very strategic for you.
00:44:11
Speaker
and you want to hire the right talent, you want to have a skilled taxonomy of the company. So a skilled taxonomy that will help you hire right. Once they are hired, you can do a career planning. Once the career planning is done, you check their performance and give them the development inputs. Once that is done, you give them the promotion and compensation. This whole part that I explained to you is called talent operating system, which is what Peter Strong launched as an independent. And many customers in Dubai and Middle East are using that as a standard own stuff. But that's how it works.
00:44:39
Speaker
Okay, interesting. At that stage, like 14 to 16, when you were launching this, whom were you competing against? Would it have been like SAP? SAP and Oracle, with regards to them, they were the biggest competitors. We were just going after, wherever we walked in, there was a fatigue of traditional non-cloud system, and that's where we walked in.
00:45:03
Speaker
And our role model was Workday, because Workday had disrupted everyone. Actually, Workday made Cloud what it is today. I continue to say that no one else, whoever may become bigger than them, but they were the true OGs of Cloud.
00:45:19
Speaker
So they got it. So we just followed the same thing. And we had to carry the burden of first player, right? When you're the first player, others can stand on your shoulders, but you can't stand on anyone else's shoulders. So, but I think that it helped India market to grow up. It helped bringing some credibility to Asia markets that, okay, we can also build products.
00:45:40
Speaker
And I think that's what we did, so I'm very happy with what the team did, though I'm not taking any responsibility anymore, because for the last two years, it's my colleague Sandeep Chaudhary who runs it. I'm just enjoying the cruise. Okay, interesting.
Growth and Strategic Decisions
00:45:55
Speaker
You know, why focus on large enterprises and not small enterprises? Is it that contract values and profitability?
00:46:05
Speaker
So I'll tell you, there is a founder's curse or a boon. You decide what is it, but founders have a comfort zone. And my comfort zone was to walk into a large CHRO and tell them that I can do it for you, looking into their eye, right? And then convincing their board that you can look at an Indian player, why only a foreign player?
00:46:34
Speaker
I'm not saying small is even harder to crack, but I knew how to crack the large.
00:46:45
Speaker
If you look at today, our Rolodex is the who's who of India from Amara Raja to Arithya, I can just go on to the list to fly Dubai's and Subhan, so many Middle East and so many other parts of the world. So I think it was hard, but the fight was fun. And we had a great time in building that up.
00:47:09
Speaker
Okay. Understood. Help me understand the other two, like WeBox and Tagged, what are their offerings? Yeah. So WeBox is we acquired with an assumption that is the first step, employee takes an assessment that only get to a company. That was the assumption. But we realized very soon that, you know, when COVID also happened, that the company was very standalone and it was tilting towards education.
00:47:33
Speaker
more than the corporation. And suddenly, we realized that education had a much deeper use case for a company like Beebox. And we built something called India Skill Report with Beebox, wherein even the Prime Minister and President quotes Beebox report. India Skill Index is nothing but Weebox Index. And we could conduct our AICT test for a million, half a million students. We knew how India is saying. So like I remember, in 2014, India's employability score was 32%. And till last year, it was 52%.
00:48:01
Speaker
So, people might say, okay, 48% are still not employed, but I say, no, it's a glass half full. Look at that story. India had moved from India was so low for 75 years to 32. In just flat 8-10 years, we have moved to 52%. So, this is what the use case was. Large tests were conducted on them, something called concurrent tests. So, Apsuchi, proctoring can happen.
00:48:23
Speaker
Thousands of cameras can run and run a test sitting in one place. It was impossible. Test results can come in half an hour, which used to take two months. So it just changed forever. It's always while competitors were required. So vbox was the last one. And last year we divested. We exited vbox and sold it to ETS. ETS owns Tofril and GRE. And that's the best home they could have found. Of course, they had other offers.
00:48:49
Speaker
But we thought that ETS probably is the best. They own the best in the world of assessments. And Nirmal and team are very happy there. And I'm also very proud what they have done. People strong also got a, shareholders got a great price. And I think this is where we are.
00:49:03
Speaker
So, WeBox was like competing with an aspiring minds, something like that. In that zone, many players, many players, but 100% of the players were required, Akshay. All players, the top five players, four were required, only WeBox was left.
00:49:20
Speaker
And we initially were not keen, even the founders were not keen. And then we said, no, probably this is the right time because now people strongly intact, can't leverage it anymore. And vice versa. So probably it needs home where it can create a global impact. So I'm very proud now every time a TOEFL test will happen, there'll be a bit of Indian technology in it. It gives me a higher at least. And so a Weebox assessment would be like,
00:49:48
Speaker
a test-taking organization like say a cat would contract with a big box store. Absolutely. Absolutely. Very large assessment tests will be conducted on them. High stake tests, high stake, where nothing can go wrong. Now the government's fault, if the tests don't go well, we all know that, right? That state government will fall if the tests don't go well. So this is how important it is.
00:50:11
Speaker
Okay. And similarly, if I go to tag, do you want me to pick up tags for the next? I have one more question on view. So it seems like that pieces of pre-selection assessment didn't really play out, right? All the like metal and all of these companies had the thesis that
00:50:30
Speaker
Yeah. In true sense, you're right, Akshay. But we realized in COVID time in 2020 that the kind of business vbox was getting was so much education centric. And they had almost, I use the word monopoly in auto croc trade. They have the test technology.
00:50:46
Speaker
Auto proctoring means they could just proctor from anywhere. So there was no competitor they had. Even the competitors use their technology. So we said we will door the box in the ambition of people strong and dark, right? And there is no point in doing that, right? I believe that entrepreneurial team is everything to us. Their customer Rolodex is everything to us. They have trusted us. So give them a home where they can grow bigger and deeper. That's what we did.
00:51:11
Speaker
Why didn't this take off? Is it that the human behavior was against it in terms of having a sheet help you guide your hiring decision as opposed to a personal interaction guiding your hiring decision?
00:51:27
Speaker
Yeah. So I will not say that corporations are not using the assessments. They are using the assessment, but please look at the assessments in three parts. There are one who are the content centric, like up 16 PS conduct. Right. So there you're not going to, yeah, psychometric, you will not go to them for technology and go to them for the content depth to question that. Right. So then there are technology takes a backseat.
00:51:55
Speaker
Then you look at technology. In technology, there will be tests which are done for mass examinations, proctoring. There will be tests which will be done only for sales people. There will be tests which are done for mass examinations, proctoring. There will be tests which will be done only for sales people. There will be tests which are done for mass examinations, proctoring. There will be tests which will be done only for sales people. There will be tests which are done for mass examinations, proctoring. There will be tests which will be done only for sales people. There will be tests which will be done only for sales people. There will be tests which will be done only for sales people. There will be tests which will be done only for sales people. There will be tests which will be done only for sales people. There will be tests which will be done only for sales people. There will be tests which will be done only for sales people. There will be tests which will be done only for sales people.
00:52:13
Speaker
the biggest player will touch 100 crores. Then comes one category called assessment centers where physical assessment centers are conducted. Now they are converted through tech. So it's so varied. We said becoming a leader in this space is very hard. So when the consolidation is happening in every part, so let it find its own way. And that's how we find found ETS. Okay. Okay. Okay. And tell me about tagged.
00:52:39
Speaker
So Tang does a very inspiring story for us because we were the first player, we won Mahindra's, we won Tata Motors, we won like, we are running the end-to-end function for them, right? Hiring. So every hiring, what happens? And this company is a profitable company. And in the last seven to eight years, Devashi Sharma, my founding member at People's Strong, is now the CEO of Tag. And have done an incredible job that we are the number one in the country with global players operating in India, but no one has touched the size of Tag as of now.
Tagged's Market Innovations
00:53:08
Speaker
So it's a very interesting thing that we walked in and we told I remember the first pitch we gave to HDFC live. We said, okay, we will run. You have to hire 4,000 people a quarter. We will hire it for you like an assembly line. This is the assembly line called TACT. This assembly line will find seniors. It's our problem, not your problem. We'll get them assessed. We'll get them taken through the whole interview round. We'll get them onboarded and then hand over the keys to you.
00:53:32
Speaker
So they had never seen something like this and we said we'll do it for you. This is what Mahindra did and we have done something right that Mahindra had renewed three times. Tata Motors had renewed, Wipro did that project. I remember when Wipro signed a new scheme which we never wanted, a 100 crore project grant to go.
00:53:50
Speaker
People strong that time was people strong and tag got it and you know they're all long-serving customers and the company crossed 100 crore revenues first, 100 crore revenue cost in RPO industry was tagged.
00:54:04
Speaker
and profitable now, large team, we are about 700 people in tag, nine leadership team members or green with the people tag for both in five years. So a lot of good things that happened at tagged and global players are our partners, some are competitors, both exist here. Yeah, we fight with the who's who in project and we have fun whenever there is a global competitor and somebody's bad mouthing. This is a new trend in India, people bad mouth.
00:54:32
Speaker
it wasn't there earlier. So when people bad mouth, we just simply say that this is the customer Rolodex, talk to your friend and see what they have to say in that. So that business is building on what I call NPS, Net Promoter Score. Since the customer is speaking well, we say you go ahead and but it changes the game of talent attraction forever.
00:54:54
Speaker
Is tagged a project manager? Is it a project management service that we will project manage your hiring and continue to work with recruitment agencies and
00:55:08
Speaker
Let's pick up Mahindra, Tata Motors, Wipro, Arsalan Mittal, any of them. So suppose we had 500 consultants, they are working. What do they do? They are throwing CVs at you, whichever stick they get paid for it, 8.33. Then there are contests, that is my CV, it's your CV, and there are all illicit practices can happen there. Now there is one payout that they do.
00:55:28
Speaker
Now they do one payout only to one company called TAC and extract the responsibility to source people. If I can't source people, I have penalties because the business can't wait. Sometimes, maybe just in 2% cases, means 2 out of 100 times, we go out and take a help of an expert to hire or source, not hire, just source. Otherwise, we don't. 98% plus hiring and practically 100% is done by us. So we source.
00:55:53
Speaker
We manage the assessment. We manage the whole interview process where the interview is done by customer. And then finally we make an offer on behalf of customer. Again, it was never done. Nobody was ready to do because in this business you end up paying almost one third of the fee on day one.
00:56:11
Speaker
because we are a committed business, right? You can't treat me like, pay me only on success. So one third of the fee come at the signup of the project every month, if you're giving me a hundred rupees, you will give 50 rupees on day of signing so that you won't revert. And the 70 will come when the person will join. So it's a very unique model. India was not used to doing it as today. I'm so glad that there are at least a hundred companies who are running on RTO and out of them, about 70% will be attacked.
00:56:37
Speaker
And the payout is still like one month salary or how is the payout determined? Typically payout is determined in the range of five to ten percent depending of five to ten percent of annual salary depending on the various factors, number of positions, availability of talent, etc, etc.
00:56:57
Speaker
And it's a complex billing structure wherein you pay some part as advance, some part as on the closure. And we've started calling it subscription fee because there also we are disrupting by giving the logins and telling we would give an enriched CV in the system.
00:57:11
Speaker
and you have a fully enriched CV, which is ready to hire. Typically, the CV you get is 10% populated, if I can say, for what you want. But imagine if you get that CV, which is 90% populated. If you want to know the salary is there, if you want to know the reference is there, if you want to check the interview, it's there. If you want to check three other things, it's all there. If you want to get psychometric, it's there. If you get a CV like that, technically, you don't need to meet. You can just hire the person.
00:57:38
Speaker
Right. So we are taking the recruiting to that level, to an enriched engine. So tagged is becoming more an engine or a platform than a service model. But this shift will take about a year or two. So you are competing with Nokri in a way, or you would compete? Not at all.
00:57:57
Speaker
No, not at all. Actually, Nokri and monsters of the world and the job communities are the biggest source for that. Actually, that's the biggest cost for companies like that.
00:58:09
Speaker
So we take people from them and the rest we enrich because those CDs are not enriched. Then we spend time, we enrich, we do the assessment, we run everything for them. Once we run everything, that CD is no more a CD, it's like a living document. We said, now this living document is ready to hire and we basically allow it.
00:58:30
Speaker
So there are two, from what I understand, there are two revenue sources for tagged. One is an RPO model, which is success fees, but it is not the typical success fees because here it is upfront commitment, 30% paid in advance and so on. And then second is you're now also selling a subscription to access the database, which is where you're not going to manage the recruitment. The customer is just paying for accessing the database and the database is a database of enriched profiles.
00:59:01
Speaker
But the second part that you said is very similar to the first part. A subscription has two elements. Once you subscribe, you get data, then we get your position and start populating them. But on a system you get populated, then the whole thing, we also agree with you who will interview, put the video in it, and then at the end of it, you again pay some part to us at the end of it. So it's not only subscription. It's subscription come to us.
00:59:26
Speaker
It's not a complete DIY. There are elements where tag will always do. Therefore, our ecosystem will have on one side the job boards and on other side the interviewers and things like that. There are community, the whole ecosystem through which we deliver.
00:59:42
Speaker
Okay. Okay. Understood. Okay. Understood. And it obviously makes sense to continue to have success fees because I think you are aligned with the customers. You are aligned with the customer. You don't want customer to then be dependent on their anyone else. They should just look at this because otherwise you're not solving that problem. The biggest problem in the recruiting market is this. No one owns it up.
01:00:05
Speaker
We are saying we are accountable for your hiring. And if we don't do it, you penalize. People will stop using it. If for 10 years, 7 years, we've been able to repeat the business, it's just a sign that customers are comfortable. What's your take on the traditional recruitment agency market? And I'm sure you know there are like maybe some 20,000 hiring agencies in India. It's highly fragmented. Do you see that industry getting consolidated, being disrupted?
01:00:36
Speaker
So let's look at industry in three buckets. One is the search forms, right? The well-known search forms, and then there are a lot of new search forms which are coming up in tech models. Even search forms are likely to be disrupted, but there's no clear answer today, but there are ways of completely getting disrupted, right? For sure. So that's the job form. Then comes the... Is the agency with the sizing?
01:01:00
Speaker
Okay. They're like confetti, zig-ons, zenders of the world, right? They're charging whatever they're charging, hefty fees, right? They sometimes even charge 30% or so for people. So that's one part. It is a big duopolies kind of market where there are other players, but very interesting. And then the second layer come where you hire mid-talent, right? People of salaries from 10 lakh to 50, 60, 70 lakh.
01:01:25
Speaker
Right. All these kinds of players, which comes in, which are decent size players and they play on that. Some of them are becoming pseudo search for the segment. Right. So they've started selling and then they're coming 25,000 placement companies who are playing anywhere. They have no rules. They want to just play and it's a very hard fragmented market.
01:01:50
Speaker
Everyone thought that they will reduce. I would like to believe that from 40-45,000, they have come down to 25,000 agencies. That's my belief. But they have not gone zero. They will not go zero easily. It continues to be a very hard play. Their life is hard. They are the biggest customers of job boards.
01:02:09
Speaker
60% of the customers of job boards are these players. So they are an integral part of the system. However, if you ask me 10 years from now, very high probability that this market will get disrupted in five years. No, I don't see them going in five years, but in 10 years, even if they will exist, they will exist very differently and probably in a more fair and a more deeper market, not like a one inch deep market and a mile wide. That's the market.
01:02:38
Speaker
There would be a new age recruitment agency or a few new age recruitment agencies coming up. That's right. And like RPO is like cutting across the middle and a little bit on the top. RPO will start cutting the front layer. As of now, it is not organized again, I'm saying. That's why it's not happening. But it is starting to happen that a lot of players are jumping into RPO to consolidate. RPO will heat up all the two basic and the middle businesses.
01:03:07
Speaker
Yes, yes. I mean, RPO is the only business which can scale because you have upfront commitment from the customer. That's right. That's right. And so it's a win-win, but customers are scared because they've had some bad experiences. An organized player came up and everybody abused the word RPO, but they don't survive, but they spoil the market. So, but that's a part of growing up. It's everywhere.
01:03:29
Speaker
And in the RPO model, do you deploy a human in the client organization or is it all through logins, dashboards, technology? Through logins and dashboards, there are 10, 20% people who go there when there are things stuck or sometimes you need interactions, more like account managers, but not a traditional people who are not there.
01:03:48
Speaker
Okay. I guess the traditional RPO definition involves deploying a human in the organization, right? It was so we don't call ourselves traditional RPO tag team calls them digital RPO. They call themselves an enrichment engine. We are about value add, not just faster prediction.
01:04:07
Speaker
So they take pride in saying we will solve each hiring manager. According to them, HR wants success for each hiring manager. So our customer is that hiring manager. They're saying, can I help each hiring manager? So this word each is very important in hiring manager. That's their customer. Though we get paid by HR, but if they're happy, HR is happy. So that's their focus area. They say we are going to make life of each hiring manager successful. Anything which is non-value added, we'd remove.
01:04:34
Speaker
We'll become that part. That's what they do. Okay. Okay. Why doesn't tag, uh, try to cut out the knockery and monster layer and directly source? And, uh, is that too expensive? You would have to spend a lot on acquiring traffic.
01:04:52
Speaker
Yeah, so let's first give a huge credit to Nokia. What they have done is nothing short of magic, right? And it's a reality that they are a monopoly in this, rightfully so. They deserve it. They have done it for over the years, their sales engine, the way they attract customers, CVs. First thing a recruiter asks is a Nokia license.
01:05:14
Speaker
right? Ask anyone. First thing is they will ask our recruiter, he'll knock me losses and then I'll go. So I think they're established there. They have helped in their recruiting market to get organized to some rate, right? What they've done is incredible. So once they have done that,
01:05:29
Speaker
To dethrone is probably somebody else's business, not our business. Our business is to make hiring manager successful. Our business is not to disrupt nochre. I think that will be a wrong challenge for us. Our customer problem is defined as hiring manager. Nochre is an ingredient there. We want to have 10 such ingredients that we can make the best dish for a hiring manager. I think
01:05:52
Speaker
It is too much. I think India is becoming too much like killing each other. I think that's not how we will build the world. If somebody's non-value act, they will get killed, of course. But if the value additions exist, let's make a beautiful dish together. Yeah. But I understand that people don't work collaboratively. That's also a problem. That's okay. We'll find a common grounds or the golden meal like Buddha. Right, right. Okay. Um, so.
01:06:19
Speaker
Lewis invested in 2010, 2011, something like that, right? Right, right. And then what was the next milestone in terms of the investors?
Financial Milestones and Global Expansion Plans
01:06:28
Speaker
Next milestone, yeah, then Renuka Ramnath and Deepak Parikh met us and they picked up majority in the company in 2017 where Lewis exited. And that time we had become a clear-cut HR tech player and an RPO which is tagged and VBox which is an assessment.
01:06:45
Speaker
So those three were there. These three assets were in one holding company called People Strong. And he was exited and multiples. I was like, I was and I am a great admirer of Renuka Ramna. Probably the lady that we all should celebrate. Somebody who could find her way in the world of
01:07:04
Speaker
Two sharks, a large pea world where she could bend a pea of her own very inspirational story, and Deepak Parik needs no introduction. And Deepak Parik is HDFC limited. So they picked up majority in People's Storm. Most of us diluted, exited. All our investors exited. So that's how the major milestone happened. And unfortunately, a year or two later, I found out that Shelly is struggling with breast cancer.
01:07:32
Speaker
She got okay, but in 2020, it relapsed and she was gone in no time. Thankfully, I had Sandeep Chaudhary who had joined by that time because she wasn't well, I was the CEO of People Strong. So I could handle the reins to him. They wish he shut the gun over as tagged CEO and Nirmal was of course the ad vbox. And it took me six months to nine months to recover and stand on my feet back.
01:07:53
Speaker
very hard times for me. And I used to believe in Bhagavad Gita a lot. And I'm still a big believer of Bhagavad Gita, I even taught it. And that's the time I realized that, you know, I don't understand Gita still. And, and that's the time I checked my attachment, I realized that I had learned to live only with her. So that's when I took a truly a backseat. And 2021, 22, I took a complete backseat and from deep and there was she shouldn't be able to go.
01:08:19
Speaker
Okay. Okay. And people strong is still a P on business. That's correct. That's correct. It's owned by multiples and little bit HDFC and my other. Yeah. Is it an IPO roadmap?
01:08:34
Speaker
So, I think there are two obvious roadmaps. One is the IPO roadmap wherein we can go IPO. The other option is that we don't go IPO and we probably look at our global aspirations far more deeply and figure out a part now.
01:08:50
Speaker
who can help us further in that journey. So I think that's the crossword where we are. And next 12 months, we will take a call towards the route we want to take. Since we have exited vbox, our IPO probabilities are a little low. But yeah, it's on the cards.
01:09:07
Speaker
The WeBox exit would have given you cash in the balance sheet, so no pressure too. Yeah, so therefore, both the businesses now, People Strong is a profitable business. Tagged is a profitable business. People Strong is hitting profitability. Both are cash generating business.
01:09:25
Speaker
So per se, they are standing on their own feet. And in SaaS, this is the call we took that we will stand on our own feet and rightly or wrongfully, but we just took that call. And it's a great thing. Once you cross 200 crore kind of revenue in SaaS, it's not easy. Very few players in India on India soil has done it. So we've crossed that 200 crore or crossing that 200 crore and it's profitable revenue almost negligible or loss if at all, but cash generated and becoming a bit deposited. So I think you don't need it.
01:09:56
Speaker
So, this 200 crore is the group turnover that you're talking about? No, no, it's only people strong HR tech. If I look at tag that's separate, tag has crossed as I told you 100 crores in spite of two bad years and vbox of course we are exited now so it is no more there. Also as a group in next 24 months we should cross or 20 months we should cross our 500 crores.
01:10:21
Speaker
But we are today looking at how can we look at our global aspirations to be quite much faster than we have. It's a science of scale-up that we continue to focus on. It never ends. I enjoy that part since I'm not running the executive business, so I can speak about these things. Otherwise, it's harder for Sandeep and Dinesh.
01:10:45
Speaker
Um, so I'm guessing your closest Indian competitor would be someone like a Darwin box in terms of similar competitors. Yeah. In Indian competitors that would be Darwin who came next to us and then, uh, did very well and came zing HR, uh, but they're in a different segment and can take up, but this is a smaller segment.
01:11:07
Speaker
I think they're much smaller, right? Sling and Keika compared to you. Yeah, so smaller, but they're all growing because those markets are important. So everyone is growing. There are many players who are going to jump in, but I think a few players, top players like us and few others and the top players, SAP and Oracle will continue to exist. Work is still not big in India. So that's where it is. Is this a winner-take-all market or?
01:11:32
Speaker
No. There'll be multiple. No. SaaS is not a winner-takes-all market. SaaS always has multiple players. But the valuation will be a function of many other things. Who has which kind of investor Rolodex? What kind of investor can pull the right kind of strings? This market is little chaotic. I have learned some of the best investor names we have seen have very interesting stories, their pushes,
01:11:59
Speaker
So I've heard the stories where people become unicorn by taking one million on unicorn value and rest of the money taking at 506 million. This is true. This is true. You can check it out. I know so many unicorns who have taken money at 500 million and one million at a billion.
01:12:16
Speaker
Yeah. So I don't know, but people just saw, so it is what it is. So I think what is more important is the, is the value being created for all stakeholders. If the answer is yes, all will survive, all will win.
01:12:30
Speaker
Why is HRTech not an investor darling? You know, unlike say FinTech. FinTech attracts workloads of funding compared to which HRTech is like typically most HRTech founders struggle to raise funds. You know, I'm sure the failure rate could be much higher in HRTech.
01:12:50
Speaker
So I'll answer it in three parts. Part one, if you remember, there was an Indian brand called Nirla's there is, and they had 21 flavors of ice cream. Right. Anyone who grew up in Delhi. Right. So right. So those 21 flavors are like the flavors of the season for investors. I'm also an investor.
01:13:07
Speaker
Education tech was everything for India at one point of time. And you know what is happening to edtech. HR tech will definitely be ahead of edtech today, right? So we've seen how much it will happen. So that's one part that investors had those seasons or flavors that they go out. Number two, the Indian entrepreneurs who are growing up are still either trying to build us point solutions, not looking at or thinking big.
01:13:31
Speaker
or they are just doing something because they like, they don't understand the market. They have not done enough research. So that's the reason the founders are not able to scale up. Big companies can also wrap up. I'm saying this is a problem in HR. A lot of people think I can build an HR. Every person sitting on the other side say, I know this is the problem. I remember so many times people walked in and tell you, I'll tell you how to run the business.
01:13:54
Speaker
And I used to listen to them. They were working and they were telling me. So this is the problem in our community. I'm a part of our community. So it's over enthusiasm that I can do it. That's the second. And third is that India market per se is yet the time is yet to be ascertained because of the price point. Our volumes are great, Akshay, better than US. But our price points are like so low, so low that the absolute dollar term stamp value becomes low.
01:14:21
Speaker
which becomes hard. So in India, right? Mahapat $1 a month is perfect, right? And within this third bucket, I will also say people don't pay up on time. India has to change that behavior. That doesn't work for us, right? It kills a lot of startups. I tell people that if you don't want to pay, don't pay, but at least pay to a startup. You know, like your employees, their employees also need salaries, right? But unfortunately, a lot of people do that in India.
01:14:49
Speaker
So these are the three reasons why I chatting in Nondale.
Profitability and Strategic Pivots
01:14:53
Speaker
Your 500CR top line, how much of that will be domestic? How much will be from other countries? I think it will be 70-30. 70 will be domestic and 30 will be from outside. Maybe 65-35 but as of now 70-30.
01:15:09
Speaker
Why not be more aggressive for global revenue? I've seen that most HR techs which raise good funding somewhere have a make in India for the world kind of a approach or a pitch. It is true for people also. However, we decided that we will first become profitable and then change that rate.
01:15:32
Speaker
So we are growing. In Middle East, we are the most important player probably other than Oracle. But we are saying we will not now burn money to rise in a country because this is a big problem. Then you're constantly on investors' shoulders. How can you stand on your own feet? Make sure you are at 75%, 80% gross margins. Make sure your avatar is positive and you are generating cash. And then you can take smaller chunks for country by country and go and do a strategic task.
01:16:02
Speaker
So I think all that is on the cards, but we are okay to be not revenue wise, number one, but we would like to be the most prominent player. Um, and amongst the top two, three always, whichever geo we are, that's the side, but profitable rather than being loss making and become number one, no point number one, no one gives you a wedding, even if they give you a little, it has no meaning. I want to kind of understand the science of scaling up. How do you take a, you know, and,
01:16:32
Speaker
Beyond the scale up, the other thing I want to ask you is about that kind of DNA change which you had to do. You were a KPO, you know, so you were a services business, which pivoted into a product business. That kind of a successful pivot is hard to see. Most services businesses, I mean, there is no reason why, for example, ABC consultant couldn't have done what Nokri did. You know, they had that legacy and understood the market and had the customers, but they didn't, you know.
01:17:01
Speaker
So, what do you need to make that kind of a pivot happen, the services to product pivot? So, let me just answer that in probably four buckets, very quick one. First and foremost is that in People's Strong journey, I remember till about 2022, if we were 15 years old, we had done some 30 off-sites and we used to number our off-sites, right?
01:17:27
Speaker
And I think it's a very important thing. If you've done one off-site in good times or bad times in six months, it means everyone, something knows what's happening. And typically, two-day, three-day off-site. We have done it so religiously. So one is that communication that you're all together. Second part is I call it manthan in the top team.
01:17:45
Speaker
So, we had a process called Cathartrist. Every three months, we used to, Cathartrist needs giving feedback. That just killed the whole insecurity out of us, right? And people used to really, I remember after the Reliance Project, when we survived, Shrelyan Dhruv, she got me into a room and said, we don't know this punk. I said, what happened? They said, we see one egoistic guy moving around carrying the badge that I have turned around the company. They said, we don't like you.
01:18:10
Speaker
Imagine two days I couldn't sleep. I said, my founders are not respecting me. They're not liking me. And then I realized, okay, this is not who I am. So I think that part, that's the second bucket that the core team can be do. Manthan can be honest. That's the second thing. And third is that all the creation that we have done, it was mostly bottoms up, but decided outside it.
01:18:32
Speaker
So we used to carry the data from outside, and change is instant. Sometimes people said, my role is not redundant. I still have those papers. People said, I'm not relevant anymore. What should I do? And when people say that change becomes very easy, it was very painful. And fourth or last, the negative calls we took, we had to take. Old timers, I sat, I helped them with jobs. They're still my friends. But I have to tell them, buddy, I have to tell them, I have to tell them,
01:18:59
Speaker
So I think those are the four things I will say in buckets when you ask this question that I did it. You know, I'm a great fan of this book Bhagavad Gita, but also a book called Ram Charit Manas. There is a very beautiful verse it says,
01:19:16
Speaker
kaha raghupati ka charitapara, means the raghupati means ram, what amazing massive towering character. kaha raghupati ka charitapara, kaha mati mori, nirat samsara, and my mind is stuck in day to day mundane activities of the world.
01:19:35
Speaker
It's that part. It's that second part that we are so struck in business that we don't take care of the character that is spread around us. We have built that character. We build that soul of the company. There are competition. There are investor challenges. There are money running out. There are bottom line issues. All those will exist in every business.
01:19:51
Speaker
But if we do that, then this change becomes very easy, not easy. And I will not take the credit. I had the pleasure of having Shelly with me, and she drove most of it. I trusted if there were rough edges, I helped wherever I could. So this is what I will search.
01:20:06
Speaker
Did you also get lucky with the financial crisis causing you to lay off your leadership team, causing the business to go down? Yeah, I think everything when I turned back in hindsight was good, as if something was holding our hand and taking it forward. But I also want to take 1% of credit to my team that luck is with the brave. We braved all the hard times. And we still see hard times, but we stand together.
01:20:35
Speaker
We are standing with each other. They don't feel bad. You know, they don't have to look. They can say, okay, Pankaj, you're not the most competent guy. That I'm okay today. But they'll never say that I could never trust you. They will always know that, you know, there is a word called service leadership. Can we build enterprises where we are there to serve our team? Right.
01:21:01
Speaker
But if you, if they know that you're not looking after them, if you're not serving them, then it's a very different story. Then it's a positive service leadership down the floor. To Yekarna Chhapeh, to Meric House's servant leadership is everything, everything. Or with combination, I call it the consciousness combination and the scale. If you drop either of them, you may become very successful. Bahaat starting materially successful companies in India.
01:21:27
Speaker
But I don't know how to say it, but let's go with it. Skill or competence or consciousness, that's what I feel. You have this favourite of scaling up. Can you talk to me about that?
01:21:41
Speaker
Yeah, so we briefly discussed last time when we spoke. And actually, so basically, like I was telling you, I drew the two by two, the four quadrants for finding talent, right? You have to make a lot of losers, doers, transformers, and scientists, right? Similarly, when I look at the companies who are especially in one to 10, not zero to one, right? When they're in one to 10 journey, where basic product market fit is being done, et cetera, et cetera. And I've done this with over 22 companies now, which are
01:22:12
Speaker
design companies, which are clubs, which are tech companies. I have done it in Banaraske Ghatbe in workshops. I have done it in Spain. I've had the privilege of doing it. These friends trust me and I take the teams out for a day or two and we do it. So where we spend time on understanding why we exist and what is our goal.
01:22:32
Speaker
And why his heart think my favorite example that I gave you Google was that organizing words information, how beautiful those three words are. Right. They were relevant there. And so can you find that why for each company, most companies don't know. I call it the spirit statement or the soul statement. They cannot say why he exists. Right. And then convert it into a goal. Like I remember people strong converted a goal saying that he will be reading and writing on five million devices.
01:22:59
Speaker
So they didn't say number of employees. They said 5 million devices. But it was a very beautiful way of looking at things. So define it in a goal that inspires you and it's falsifiable. Falsifiable means it is big enough that you think, oh my god, can I achieve it?
01:23:14
Speaker
But you know, it is achievable. It should not be so unreal that it is like we are smoking dope and it should not be so easy that we know we will do it. So there is no one giving you incentive for it or a marks for it. So have a falsifiable code. So this is one bucket of why converting into what may be converting into okay. Which is why for people strong, bringing joy, energy and meaning to work. Okay.
01:23:38
Speaker
Nice. Because we believe that when we took the business, there was so much lack of joy, energy, because people were dreaded in the paperwork of HR, salary, confusion, wrong, not linking application, 20 applications to login. He said, we'll bring joy, energy and meaning. And then that's how we will take it forward. And the mission was then that redesigned the work life.
01:24:05
Speaker
how will you go about and vision or the target was reading and writing on 5 million devices. So this is how we built it up. When we went to time, we said, we will create success for each hiring manager. That's simple, very simple, but it's profound for them, right? Every day morning, a peon towards CEO, everyone can get up and say, you know, right? So that's where I remember Weebox saying that we'll measure the world's potential and skill.
01:24:31
Speaker
They did it in their own small way. Today, they are doing it. See, Tofil, isn't it? When they wrote it, it was responsible. But today, Tofil is doing that. So I think the universe listens to you, if you believe in it. So this is bucket one, which is why and what.
Leadership and Scaling Strategies
01:24:48
Speaker
The bucket two moves into what I call devolving the power.
01:24:53
Speaker
So, as CEO, as CXO, as functional heads, we like to own and hold our decisions. So, can you push them down? So, we have to make decisions like financial, operational, people decisions, customer or sales decisions, or finally we take strategic decisions. Strategic sometimes on all the four, but if you keep these five separate, maximum five.
01:25:15
Speaker
I tell people you write each of them. I remember a team called Vyaktitva did this exercise with us. That write these things, the decisions you take. We basically, I gave away 50% of my goals. If my company is going at 50%, then I should take 50% decisions less, right Akshay? Then only I can grow. So I told everyone, if you're taking, seeing the old decisions means you have not grown, company has grown. And if you are taking less decision, then you must push them down. You can't push them up.
01:25:43
Speaker
If you push them out, though, it is devolving the bar, which is hardest thing for people who are letting go. I remember I told my CFO, now you will be taking that decision and you open the door. I said, hold on, come in. I said, why are you telling me? I just thought I'll tell you. I said, this is CC culture. CC culture means you put the boss in CC, copy and everything will be taken care of. You're obligated. I said, no, I'm still going to take your life if the decision is wrong. Part of the decision is wrong.
01:26:10
Speaker
Right. So I think that's the second bucket, which I call the devolving the path. And the third part came, which is how do I enable the people who have given the decisions? Can I re-infense them? Can I work with them? So I need to give them time, three months, six months, whatever. And boss, you have to pick up this one. And most of the times it's not the person who's getting the new role, it's the person who's letting go the role.
01:26:36
Speaker
doing the mistake. We feel we have let go, but we don't let go. And last stage is once the result comes, how do you manage the consequences which are not just positive but negative too and not just negative positive too. I've seen either people just fire and they don't appreciate or they just appreciate don't fire.
01:26:55
Speaker
I think both are required to build a very meritorious. That's my amazing. Okay, so this is about organization building for scale up. The other part of scale up is scaling up.
01:27:12
Speaker
customers demand and you are basically selling to like a Fortune 500 that is the kind of businesses you are selling to. So what is some advice you can share on that? Like how to sell to this kind of a customer? How do you get the deal? How long does a typical deal cycle take? How do you enable success once a deal is signed? Because it's not just about signing a deal, but you also have to ensure adoption.
01:27:40
Speaker
So this is the holy grail, right? Once you start growing, it becomes harder and harder because at enterprise level, there are so many stakeholders. You don't know what's running in whose mind. Who have you pleased? Who have you not pleased? The big problem in HR tech market is that the customer and the consumer are different. So the buyer is HR function, but the user is an employee. User may give you the best rating, but if HR is not happy, you're not happy.
01:28:09
Speaker
And the white sugar fries too as well. So it's a very hard thing. It's a little bit like a pharma business. In our hiring business, it's the hiring manager success and HR success both, right? So you have to do. So I call it mapping is the big game. The best companies do mapping at all the three layers and detailed documentation around it. I think that discipline I have not seen.
01:28:36
Speaker
So the first layer is the CXO layer. In our kind of environment, CXO is a must. The second layer is the CXO minus one layer. They are typically program managers.
01:28:46
Speaker
right? And the layer 3 is the influencers. They can be CFO, they can be somebody who's an important part of that ecosystem, right? They may not be in the hierarchy, but they're important. Now, best of the account directed teams have written documents around it. So biggest problem with customers and account management teams is that they don't have same goalposts. So I am hitting a goal and I think I hit a goal, but the customer might say that this was not a goalpost.
01:29:14
Speaker
And you'll be amazed like 90% of the times it's true. And sometimes you have to push back the customer that, okay, this is not the goal post. This is the goal post or customer will convince you either ways. Once you're convinced, then go and run after it.
01:29:26
Speaker
Secondly, your communication track. How well you're communicating proactively, right? The customer request gets lost in L1, L2, L3. This is a reality, right? So how can you make your system DIY? How can you launch certifications in the market? How can you educate the market? SAP did a great job in this, by the way.
01:29:46
Speaker
At one point of time, certifications that people used to take, we are that bradge with the proud, right? So probably that is required. Yeah. Our sales force. So I think those were the things that people don't have launched a certification. They're trying to do that in Dubai, in India, many of it. So I see that doing. So this is the level you're doing, but will it guarantee you upsell? Answer is no, but will it increase your probability of winning? Answer is resounding. Yes.
01:30:13
Speaker
So that's how it will happen. But when it comes to the new age sales, you know, the Tofu, Bofu, Mofu, the top of the funnel, middle of the funnel, bottom of the funnel. So basically a lead comes, you put it in the top of the funnel. So the way you generate a Tofu lead is very different than what you do with Bofu or what you do with Mofu.
01:30:33
Speaker
So once the lead has come in, it can come in through a marketing engine. It can come through the reference. You have to see what it costs. Each leads cost me $100 or $200 or $1,000 you'll have to send. Then what will you take it to a point where I'm submitting a commercial proposal? Customer is interested in me. I have held the account stakeholders together. And then comes the third part. And when I'm converting it to them,
01:30:57
Speaker
What will be the stakeholders at board? What are the influencers that I need to do, which is beyond our technical assessment, right? Which will sway the decisions towards me. So those things you apply from a delivery perspective, there is a performance that comes after plan.
01:31:14
Speaker
Planning needs sales team or marketing team plan. Who's my ICP? My ideal customer profile. Once that is done, then they go and perform, I call it. Now perform has different stages. Always I tell CN people don't make proposals. Let your proposals be made by solutions expert. You will do a mistake.
01:31:35
Speaker
don't have the common role, right? Let it be a two in a box. Sames must go and convince customer believing in that solution, but let a solution architect build that proposal for you.
01:31:46
Speaker
Right. And once that is done, then what commercial progress you can play against sales guys should not put the commercial. That's now the other side financial, like salesperson has got a solutions expert to write. Then the next stage comes where salesperson doesn't commercially submit is the finance team to submit because you can't write a wrong clause or stuff like that. But of course salesperson is the anchor. And then the negotiations and to and fro and the combinations, permutations and influencing happens.
01:32:14
Speaker
That's the closure. So planning, then performance cycle, and then the closure cycle. In closure, you will lose, you will win. But have you given your best is the question. This mapping that you spoke of is something which every salesperson would intuitively understand. Does it need to be like a documented mapping that these are my layer one, layer two, layer threes? Or are you saying that as a salesperson, you should be cleared of this mapping in your mind?
01:32:43
Speaker
So I unfortunately believe that everybody claims that they know, but if I tell them you have three minutes, tell me, how will you build up a saints person? They will not be able to answer most. I'm not seeing all right. Number two, those who answer though, they don't follow this process.
01:33:00
Speaker
Number three, you can put any words, you can replace the words that I said and replace it with anything else that you like. You can call whatever stage or 90 or advanced, whatever you want to call. But are you running that stage like a science, right? So at the end of the day, if your tofu, bofu is rich, it is bound to show results at the bottom of the funnel.
01:33:24
Speaker
So someone has to hold all the three things very differently. Once they hold it well, then you can see the results. And hiring the salespeople are not that challenged, but can they overachieve their quota every year? That is the kind of leader you're looking at, right? Right. So that's really nice. And what is it that you do for top of the funnel? Is it like events or is it also like, say, performance marketing and Google AdWords and that kind of stuff?
01:33:53
Speaker
So sasworld can you can check with others but my belief is sasworld you will do of course everything you will do performance marketing and the best results still comes from events. I think it's unbelievable but the roundtables and the results give you the best results.
01:34:10
Speaker
And all other things help, the ecosystem that you're building, customer reference stability, big one. Then it is coming down to somewhere that my performance marketing reaching to them. Then it is coming down to that, what are the my personal connects that I'm keeping alive. So all those things come together, but the end of the day event is one big source where you get knowledge.
01:34:34
Speaker
And what does events mean? Does it mean going and participating in industry events or does it mean connecting your own events?
01:34:43
Speaker
So you cannot be missing the large events because your presence has to be there, not felt there. Sometimes it's unnecessary even you have to do, right? And since I was the initial investor at People Matters, I know that how important it is that those events to be there or SHRM or anywhere, you cannot be missed out of there. But I think a great engine you can create if you have a
01:35:09
Speaker
IP-led roundtable format or IP-led event, right? IP means suppose in, I'm just taking an example, we have something called decoding jobs intact. It conducts every year where it says automate what are the trends, the report comes out, best jobs, et cetera, et cetera. You have media partner like best companies to work for. So that thematic IP-based you're doing not share.
01:35:33
Speaker
That's part one, right? Part two is you do and you go and you say that, okay, for my trade, for instance, people strong says that how will I go and build up the case studies of one industry? So I'll take an industry cut and I'll go deeper in that. So I'll organize industry roundtables, like I'll pick up the BFS industry and I'll do roundtables and I'll make it rich.
01:35:54
Speaker
And third is you will get some path-breaking businesses which are associated with your business, right? And you will get them on the same platform and invite customers. So all the times when customers walk in, he or she should take away something from that meeting. So all three formats will work and all three are fantastic.
01:36:10
Speaker
One is your own IP, one is with a partner where you can take them or third you pick up one industry vertical and go deep. All the three formats work for you. Those were the three kinds of events
HRTech Fund and Government Initiatives
01:36:20
Speaker
I was referring to. Talk to me about your journey as an investor and what made you interested to go deeper in that, start your own fund. And you must have started as an angel investor and learned a bit about investing before becoming a fund manager.
01:36:36
Speaker
Actually, no. I straight away started with the fund. I realized there was no investment happening in HR. And the same problem that you said, no one wants to invest in HR. I said, why people don't want to invest. So I started an HR fund with my leading partner, who then I divorced. And we both basically said that, yeah, we will do something. And we ended up making some of the finest investments, like people not as a workforce check.
01:37:00
Speaker
And then we went on with health insurance, we went on with no scale, and we did many investments in HR space. So that became very nice. However, it was a small fund, but from those days, 50 crore one was not a small fund. And then we moved to second part. And when I started something called work universe, where my admission was that how do I build 10 million jobs for India?
01:37:22
Speaker
When I'm at PM, when I looked at India agenda of 100 million jobs, I was inspired that why not at least 10 billion instead of creeping government is not doing that, or somebody says this and that. What is our contribution? So our contribution is we do 10 billion jobs. So that fund, and I'm so happy that the first investment was Avigna. Now it's almost a million people that they're giving livelihoods, right? And the largest gig platform.
01:37:46
Speaker
There are others that have been made investment and all are helping Sunstone. Sunstone did exceedingly well. It's a placement, it's a business model for MBAs where they are saying we are going to build accountability in education, which was not existing. So that's the second one. And then I looked at, I said, what's the larger way? How can I build companies? And yet create an impact. So we created a GRI framework, Akshay.
01:38:15
Speaker
The D is growth and R is returns and I is impact. We said how investors are interested in growth and returns, right? And that's the traditional responsibility we have. But impact is also important. So we said, okay, we have to return 30% to 40% IRR to our investors. Can we do it meaningfully? So growth and return within that. And we said, okay, if we build up a thesis
01:38:40
Speaker
around mobility, distribution, and employment. It will be beautiful. Mobility is the future. It can impact the carbon emissions maybe 1% over a period of time. Second, you look at the distribution for the largest supply chain network in the country, maximum creators of jobs.
01:38:55
Speaker
and peace for employment in itself. Like Unstop is our investment. We just announced yesterday, quote, times covered, our track check, P.U. Spence role of Nenskart in Aski, India, that has carried capital to invest. Now it's giving identity solutions. So when I look at this whole layer, I'm very excited that it is likely to give us, hopefully, the returns, which are fanatic fund returns, but this. And this is a CAC2 semi-fund. Now we're launching the bigger version of Carrot. We are three partners. So I'm excited. I'm excited to build this up.
01:39:25
Speaker
And this is like your personal wealth, or have you also raised money from external GPs? So actually hardly of my personal wealth, mostly a, mostly a LP man, a limited partner that is called three of us are GPs and all these MPs are invested money. My initial MPs were my friends from HR community.
01:39:45
Speaker
and then came the LPs from our distribution background and now we are getting LPs which are very large family offices and global companies who are coming along as LPs to build up the India's next version of 10 million jobs and probably some carbon emissions that we can help with. So I'm very thrilled with this whole thesis. There is no fund which is focusing on this three together. So we are excited with that.
01:40:11
Speaker
And like what stage do you invest in? What kind of check size and what do you look for in the founding team and stuff like that? Till now, yeah, till now we were looking at half a million to a million checks, but in the next fund, we look at a $2 million checks.
01:40:27
Speaker
That's what we're looking at it. Typically, we look at three things. One is, is the time existing where a business can groom and mushroom? That's the first part, right? So that's the first thing. Second, we look at is this entrepreneurial team has it in them to take it forward, which is the hardest part to see. So we want the people who are not breaking the rules, who are not breaking the legal frameworks, right? Legal is a must. But who are going to challenge every room and break it if required as long as it is not legal.
01:40:57
Speaker
You know what I mean to say? So you meet entrepreneurs and they will say, okay, this is a society norm, right? Which is a social people. This is a community norm. Our community has set it up, right? My business community, my VC community. Then there are administrators or gurus. They will say, so entrepreneurship is a bit of thesis of antithesis, right? I will prove it.
01:41:19
Speaker
So we are looking at those kind of Mavericks who can say we can do it. And best is that I asked them a question on their numerator and denominator. Very few can answer their numerators and denominators.
01:41:31
Speaker
What does that mean? It means like, so for instance, we have a company called Censias, right? It's fantastic. It's a, it's the largest, almost a cold chain company that's moving goods in India, right? Amongst, we were amongst the first checks and a founder when we were chatting up and I asked him, he said, you know, each kilometer of wheel, I spent 10% on insurance. I'm just giving you an example, not an exact number.
01:41:54
Speaker
I was amazed with the level of calculation he had done. He said, I can run my business on my kilometer. This was the word he used. It was so beautiful to see the way he or she is looking at a business that 20 others in the same category will not look at it like that. So this understanding of numerator and denominator of the business is very beautiful that I have enjoyed with Dr. Knows and I encourage each one of them that please do it.
01:42:25
Speaker
Like the, the kilometer is the operator there. That's correct. That's what I'm saying. Yeah. This is how I'm doing it. Okay. And how big will the next fund be?
01:42:44
Speaker
It's about 600 to 700 crores, 400 crore fund and 200 crore green shoe, as they call it, is what we're looking at. We have a commitment of over 125 crores already. So we are just able to launch the fund only in August post elections. And then we'll have a year and a half to close the fund.
01:43:04
Speaker
Okay. Okay. I understood. Okay. I want to understand a bit more about your interaction with the government. You mentioned that you met the prime minister. How did that happen? In what ways are you involved with the government?
01:43:16
Speaker
So we keep the politics aside first and the BJP, the Congress. I'm just keeping that aside, but I'm just talking of India and what I witnessed first time. You know, I used to work a bit with government. We got a call and we did it. And then one fine day I got a call and they said, okay, why don't you help us in writing a report?
01:43:38
Speaker
what PM, where PM can see how Indian bureaucracy or civil servants be trained or educated further. I was very surprised that why it's being done. And when my double click success, I was shocked. Just to let you know, for last 70 years, the civil servants are getting 99% of them best ratings. Can you believe this?
01:44:03
Speaker
because, you know, I'm encouraged to not take risk since independence, right? So I will keep growing. Everything is okay. Now it's so sad. How will you build performance accountability? You can continue to say that it's corrupt. You can continue to say it's bureaucratic, but not true.
01:44:19
Speaker
So PM's vision was that I have to improve citizen services. And he said to improve citizen services, I have to take out all the traces of that colonialism and make sure that we are proud of India and then enables that. He said, so you guys are HR guys, why don't you come and train? So that's what he asked us to do. It was a very bold decision. And there are 2.8 crore civil servants in India from a post-menopolis man, police movement to a IS officer.
01:44:46
Speaker
And he said that create a vision for them, show us how it will be done. And Shibu Lal, who was the ex-inprosess, he was asked to chair it. I was invited and go in from Egon Sander. Three of us met. We created a last team of 30 people who basically helped us. We took out seven, eight months to submit a report. It was a 500 plus pages report that was submitted. It was received very well. And I think a couple of months we got an approval that why don't you set up a company?
01:45:12
Speaker
And Kamiyogi Bharata 100% government-owned subsidiary was created with a capacity-building commission, which is a policy body. And they said, now you take it forward and implement this, what you've written in the report. And that's when I was, again, called back. And I was told that, OK, you are. Can you join? I said, I can't join full-time because it's very hard. But I, of course, can join in some capacity. So they asked me to join as the board member. And a very smart board of 10 people was formed.
01:45:38
Speaker
And we are trying to now build this platform. I was so happy that in the last seven months, over 3 million people have come onto the platform, 30 lakh plus. We still have 2.5 crore more sales province to be onboarded. We got a person like Abhishek Kumar as the CEO of this whole initiative. And he's the one who launched Digi, a very well-known person in our digital public infrastructure space. So we're very excited about it. Incredible and badly created.
01:46:05
Speaker
This is the digital first platform, like you can learn through a mobile app or like something like that. Yeah. So it's called I got integrated government online training. It's a completely e-learning platform, but massive content is being put up. India has government training institutions, which are in thousands of records.
01:46:27
Speaker
all the content is being digitized, put on this. There are domain competencies, there are technical competencies are being put into place. We are launching passports for performance that we will carry it like a passport that this is what I have learned.
01:46:44
Speaker
People can grow in their life. Their value will also be valuable for private sector. Today they are only valuable for government sector. So we are just trying to democratize this whole learning in a way that the government and private sector will almost go hand in hand. We'll not see them different. We'll see them as competent as here or vice versa.
01:47:02
Speaker
So how do we do that and bridge that gap is what we are objectively looking at it. Make Indian civil servants, civil society more responsive towards citizen services by enabling them and holding them accountable for performance.
01:47:16
Speaker
I have a feeling that digital training works when the learner is intrinsically motivated. For example, test prep and, you know, digital, I mean, at tech, online learning, whatever you may call it, will work very well there because the learner is already motivated. The tech part of it is making access more democratized.
01:47:38
Speaker
Will it work in this case? I am assuming that the learner may not be as motivated here, and probably you need that in-person feel to build engagement. So, we've actually two parts to it. Part one, that we must know that the 30 lakh people have come every day, 2,000, 3,000 people are joining in on their own, right from the remotest parts of the country. You can't imagine a security guard sitting somewhere on the hill.
01:48:05
Speaker
Some of them are just learning hours and hours. There is hunger in government to learn. No one trained them for 70 years. No one took care of them, right? So they are getting number one part. So there is. Part two is no one is saying that physical element will not be there. There are training institutions which are taking it as an extension of a physical program. They are putting it up.
01:48:27
Speaker
So, I have not given you details but there are capacity building plans being written by every ministry. They are getting integrated. Some programs they are doing physically. Still the training institutions are on. But suddenly the whole orientation is changing towards performance. That we have to improve citizen services. That's what coming at the center. There was no, it's like India flag. It's like India logo, right? That are a shuk chakra. So suddenly now we are saying the central point is citizen services improve.
01:48:54
Speaker
It doesn't matter what you write. We exist to improve citizen services. So 360-degree feedback, we have a high level of time, but it's going to be done in such a way. It's the most ambitious global project. No country ever has launched such a large capacity building for citizens. We are proud and we'll be proud.
01:49:13
Speaker
Yeah, in India scale, it's open source. We are building on Sunberg. We took help of Exeter. We are just building something which we will be very proud of. Amazing. As a founder, how does one get more involved with the government? And I'm assuming that there would be a lot of benefits of getting involved in government initiatives. Can you talk a bit about that?
01:49:42
Speaker
So it's a hard thing. Most founders have a very limited time in their life, right? However, if they don't have high expectations and they go there to contribute, it'll be easier. That's rule number one. Rule number two is that you should try and contribute through your technology initiatives as much as possible. And number three, deal with a layer which you can handle, like a senior layer. Sometimes you can't handle a junior layer.
01:50:11
Speaker
and put the timeline to your project and then eject out without any expectations, like a noble citizen. Swamir Khan, you went and you delivered and you stepped up. Yeah, that's right. You should know when to exit. It's true in companies. It's true in government.
01:50:27
Speaker
I want to end with understanding a little bit about the spiritual side of you. You have mentioned multiple times about being influenced by the Buddha, by Ram Charitmanas, by Gita. Was this like from childhood or where did this arise, this desire to seek answers beyond the traditional way of looking at things?
01:50:53
Speaker
Probably four stages of life. One, when I was a child, I used to love the stories of Gods. I don't know why. I was just fascinated. And any God, it can be a Ram, or a Lakshman, or a monster story, or a Jesus story, everything I used to love.
01:51:08
Speaker
I don't know why. And second stage is, you know, when we were starting People's Strong, we had no money. I had a one month salary, right? I had liabilities, home at loan, wife was not working. My sister was to get married. Everything, you know, was the wrong time. People told me not to start. They said, this is not a time you're at your peak. I was 28, HR director, Hughes Software, from salary. They said, don't do this. So that's the time we turned to Bhagavad Gita. We used to read it every Sunday. For five years, we read it.
01:51:36
Speaker
It gives so much inner confidence that we could do it. So that's the second part. Third, when I lost Shelly, when I lost Shelly, I realized that I need to go deeper. I'm still at the surface. Right. And fourth, once I started teaching, I just now left at a very different level is what I would say. Once I started teaching, it just, I have taught the firms. I have taught school children 300. I have taught CEOs, 55 CEOs, CXOs.
01:52:06
Speaker
at my home, I have a small Gita room that I have created. So I'm saying it has just changed my home. My home is like a, I feel like a temple, like my son, my wife, my help at home. They are all like that, right? So it's a very interesting thing. That's the fourth stage that it happened. And it's beautiful, you know,
01:52:26
Speaker
Since you asked the last question, I'll quote my last words of Bhagavad-gita to just explain you.
Philosophical Insights and Audience Engagement
01:52:32
Speaker
And it is everyone's story, Akshay. It says, yakri-yogesho-krishna-yakur-patho-dhanodhara, which means wherever there is consciousness called Krishna, right? And wherever there is a skilled archer.
01:52:44
Speaker
right? Wherever there is a skilled arsha, okay, so whenever there is a consciousness called Krishna or wherever there is a skilled arsha like Arjuna, so consciousness and skill is being married. Yathriyogeshwara Krishna, Yathrapartha Dhanoda, Tatrishi Vajya, Nithirudhama, Bhutarmama, which means that's where the opulence, success, morality will be there is my opinion. And who said this? It's the opposition army
01:53:10
Speaker
which was, we fought the blind King's charity and told the blind King that boss I'm telling you that you're going to lose because they have the skilled answer and the consciousness standing with them. Morality, success, opulence, everyone, everything will be in that coin. It's a summary of life. So we have to improve, you know, that's where it is. That's where it is. We understand better life. We understand better. It's beautiful.
01:53:34
Speaker
So, you were once head of learning at Hughes. I would say today you are head of learning at Bharat.
01:53:44
Speaker
No, no, but look, I'm small cog in that wheel, but you're happy to be playing that throne and I'm really delighted, really delighted with that. PM and the country chose me to serve. I'm delighted and I'm very happy outside of work you are doing, but you know, very selflessly the way you are bringing out these stories. You've touched many chords in my deep heart, so I'm very thankful to you and your team for putting this together. Thank you so much. Thank you so much, Pankaj.
01:54:10
Speaker
And that brings us to the end of this conversation. I want to ask you for a favor now. Did you like listening to the show? I'd love to hear your feedback about it. Do you have your own startup ideas? I'd love to hear them. Do you have questions for any of the guests that you heard about in the show? I'd love to get your questions and pass them on to the guests. Like to be at adatthepodium.in. That's adatthepodium.in.