Bangalore: When British publishing and education firm Pearson Plc. announced buying a majority stake in Bangalore’s TutorVista on Tuesday, valuing the online tutoring company at $230 million (Rs1,044) crore, there was a sense of déjà vu for long-time observers of promoter Krishnan Ganesh.
Ganesh has founded three companies prior to TutorVista. His first, IT&T Ltd, a hardware maintenance firm, was acquired by iGate Corp. in 2000; Customer Asset was sold to ICICI OneSource (now FirstSource) in 2002; and Marketics Technologies India Pvt. Ltd, a company he mentored and invested in, was bought by WNS (Holdings) Ltd in 2007.
The Pearson deal’s done, but the serial entrepreneur isn’t ready to move on to his next venture immediately.
“Leveraging the Pearson brand, the goal now is to go to $1 billion valuation from the current $230 million in three years,” he says. “The clock is ticking—1,000 days, $1 billion.”
TutorVista, on a service road that branches off from the old airport road in Bangalore, is unprepossessing. The decor is functional and the office a bit chaotic and frugal, reflecting the values of the promoter.
After a celebratory dinner on Tuesday evening, Ganesh began his day at 4am to fly to Bangalore, to give a pep talk to employees on the deal.
Ganesh did a course in mechanical engineering from Delhi College of Engineering in 1982 and joined Telco (Tata Motors Ltd in its earlier incarnation) in Jamshedpur. “I hated my job on the shop floor,” he says.
He moved on to study at the Indian Institute of Management in Kolkata. After graduating in 1985, he joined a company then known as Hindustan Computers Ltd (now HCL Technologies Ltd, India’s fourth largest information technology firms) as executive assistant to its founder Shiv Nadar.
Nadar, he fondly reminiscences, taught him to take bold decisions. When HCL faced a problem in its customer service department, Nadar sent Ganesh to fix it.
“At 25, if you have 400 people reporting to you, then you start thinking, why should I do this for others? Why can’t I do it for myself?” he says.
That was an era when multiple vendors sold hardware that were not compatible with each other. Ganesh and two friends founded IT&T, a hardware maintenance firm working in the area of system integration.
In 1998, when he moved away from the company for what he says are personal reasons, Sunil Mittal, chairman of Bharti Airtel Ltd, asked him to take over a loss-making company called Bharti British Telecom, a joint venture acquired from Wipro Ltd.
Ganesh turned the company around in two years. “The interesting thing is I did not fire a single person nor change a single direct report to me. So, sometimes, for resolving things, it is all about providing direction, leadership and putting in systems and processes.”
TutorVista took about three years to fructify, and in between Ganesh mentored and invested in Marketics, in which he invested “less than half-a-million” dollars. WNS eventually bought the company for $63 million.
TutorVista has 2,000 teachers in India, who cater to some 20,000 students, mostly in the US, via the Internet.
School tuition in the US typically costs $40 an hour. That, Ganesh says, meant three things: “One, it was available only for the rich. Two, you have to be desperate enough to want it. Three, because the meter is ticking, people were only going to use it for the minimum time necessary.”
One model some start-ups attempted was to lower the cost. “That is the classic, cost-based, offshore model.”
Ganesh wanted to be disruptive. So he offered tuitions online at $100 per month, unlimited. “That immediately puts it into the monthly budget of families.”
For all his thrift, Ganesh allowed himself one indulgence when he sold Customer Asset some eight years ago: a Mercedes-Benz. “Lower-end, C-class,” he says.
Following the Pearson deal, he’s changing to a BMW. He says it can’t be labelled an indulgence. “I am just changing the car, right?”