BackT. Chandroo | Giving children a head start
The chief executive of Modern Montessorionhis struggle to escape poverty and the role of honesty and integrity in business
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Singapore: When T. Chandroo applied to become a Singapore franchisee of Modern Montessori International (MMI) in 1989, the London-based education company demurred.
“Their concern was that the quality of the brand would be diluted when exporting it to Singapore," said Chandroo, who then sent his wife and brother-in-law for training at MMI in London to convince the pre-school education provider about how seriously he took the endeavour.
But when MMI finally relented and let Chandroo bring the brand to the city-state, he could not fork up the £50,000 franchise licence fee. He offered it £10,000 upfront and the rest in instalments. Being sincere in admitting that he did not have the money helped his cause and he got the franchise, Chandroo said.
“I strongly believe that in business, honesty and integrity are very important. If you don’t have the money, be upfront and honest about it," said Chandroo, who is now chairman and chief executive officer of MMI, in which he, along the way, became the majority owner.
Paying in instalments allowed him to explore the market and test if the MMI brand could succeed in Singapore.
Contrary to the traditional approach, Chandroo decided to work backwards and train teachers first. He held on for two years and used the time to raise awareness about the Montessori model of education, and also tried to convince parents about the benefit of the system before opening the first pre-school in 1993.
“When we opened the first pre-school, it was an instant success. Within a couple of months, we had 91 kids which was the number we were permitted to take in. This is despite our fees being S$895/month," Chandroo said.
The Montessori model of education, which is aimed at children aged between 18 months and 6 years, was developed by Italian physician and educator Maria Montessori.
“During World War II, Montessori got caught up in India and she did several observations and studies on children there. The word Montessori and her work is not patented. The UK-based company, from whom I had initially taken the franchisee, updated her work and came up with their own curriculum and had it registered. Modern Montessori International is trademarked. We have our own curriculum using Montessori framework and principles," Chandroo added.
Seven years after opening its first centre in Singapore, MMI decided to venture outside the city-state and expanded to Malaysia in 2000. In 2003, the firm also formed a joint venture with Pepsi bottler Ravi Jaipuria for its India venture, with the latter owning a 51% stake. The firm also set up a pre-school in Nepal under this joint venture.
MMI now has operations in 14 countries with about 100 centres across three continents, of which 18 are in India, and the company’s annual revenues are to the tune of about $40 million. Chandroo has set himself the target of tripling this to 300 pre-school centres across the globe, even as he is looking at a listing, possibly in London, for the company “within the next couple of years".
Initially, his driving force to be rich was to escape the poverty that surrounded his family. The son of a migrant taxi driver, Chandroo’s daily routine involved washing his father’s taxi before heading to school. On weekends, from the age of seven, he worked in the local market, selling fruits and vegetables, sometimes making as much as S$1 for this effort.
After finishing school at the age of 16, he joined a factory, and the job involved shoving buckets of carbon into machines. It paid him about S$300/month, a huge sum in 1969, as there were not many takers for the job because of the health hazards associated with it.
A few years later, Chandroo began what he called his real career as an Encyclopaedia Britannica salesman, which involved selling the tomes for a 12% commission. The tiring job required a lot of effort for little pay, but Chandroo said it taught him lessons that no university could have, and he eventually rose to become the regional sales manager.
He then left to set up two firms and became the distributor for a children’s book product based on the American children’s television series called Sesame Street.
But it was a technological change—the advent of CD-ROMs—that forced Chandroo to consider venturing into the education business.
“CD-ROM then came and parents were interested and excited and we saw a decline in our sales. At the same time, parents were also asking me to refer them to a good kindergarten, and many were saying there were no good pre-schools. I told myself that it was time to shift focus from selling educational products to running educational institutes," he said.
After studying the market, he hit upon the idea of getting the Montessori to Singapore.
On average, MMI charges S$1,200 per month, while in some of its bigger centres in Singapore, it costs as much as S$1,400 per month, but Chandroo justified the price, saying the brand is targeted at mid- and high-income families.
“Our niche is that we are a premium brand. Even in Singapore, we charge high fees, but some of the other schools charge S$1,800-2,000. In markets like India, our fees is about ₹ 4,000/month," he said.
In Singapore, MMI is also working at another brand of pre-schools called Hamilton that is aimed at mid- to lower-level rung of customers, with fees being pegged at around S$700/month.
While MMI accepts toddlers (18 months) in its Singapore and London centres, in several other countries including India, parents only send their children to pre-school after they are two years old.
“Our USP (unique selling proposition) is that we are perhaps the only pre-school operator that also runs teachers’ training institutes. We ensure that our teachers offer quality education," Chandroo said.
Sharing his thoughts on the challenges he faced, the MMI chief executive said an “acute shortage of teachers" was affecting pre-school education both in Singapore and abroad.
“Our teacher-to-students ratio is between 12-15 (children per teacher). Because this is early childhood teaching, we need people with passion and love for the children. Not many are competent in handling it. The attrition rate is very high. Many are overwhelmed with the environment and leave—very few stay. Costs have also gone up. There are a lot of other careers that compete with teaching and attract people," he said.
Last year, Chandroo received “Asia’s Most Promising Business Leader" award in Dubai, an award validated by KPMG India and a panel of judges.
Edited excerpts from an interview:
You became successful by riding on the franchisee model. Would you recommend that entrepreneurs look at this model, especially since several global brands are not present across the world? One of the common problems with franchising is maintenance of quality.
I would definitely recommend it for two reasons. First, I am a franchisor. If you have a good brand and if you are confident of the brand, the fastest way of entering and targeting a market is through franchising. If you have a good business model, go into franchising. That is for the company. For budding entrepreneurs, yes, you can start something new and slowly build it up—but if you buy an existing franchise, the success model is already there. I would urge entrepreneurs to try and become franchisees—but before you take it up, make sure you do your own research on the product, methodology, business model, market size, investment required and even the agreement that you will sign so that it is not lopsided. I would like to suggest that they go one step forward and, for example, if you want to become a franchisee of Subway, then go and spend a week or two at one of their outlets. If you are convinced, take it up. Yes, quality can be an issue for the franchisor. We have a separate audit team that visits our facilities every month. We also get feedback from parents—we have a direct communication with parents and they can write directly to the HQ (headquarters) if they are not happy with anything.
Singapore is becoming a start-up centre—would you like to see more youngsters becoming entrepreneurs here? This generation can afford to take the risks unlike most people of your generation.
I will encourage all youngsters to look at the entrepreneur route and try their hand at starting something on their own. But I’ve observed that many of them are looking for something big and are looking for instant success. My generation was prepared to start small, and after many years they saw the pot of gold. Not necessarily that all businesses can become an instant success. Are they prepared to wait is one factor—are they prepared to fail is another factor; and if they fail, are they prepared to start all over again? When I went into business, I did not have money and did not have a godfather to help me. I did not have government grants like you have now. I tell my bankers that you are willing to lend me millions now, but there was a time you would not give me S$5,000.
Where do you see MMI’s growth coming from? How difficult is it to penetrate new markets?
Africa is a growth market—we are already present in Nigeria, Kenya and Egypt and we can expand. But most of the growth in the next couple of years will come from emerging markets in Asia. I see Indonesia as a big market—we have just registered our company there. We already have two franchisees there and we are establishing our own teachers training academy there. I see big potential in Vietnam as it has a population of 100 million, and of this, 70% are below 35. These will all be young parents and they are hungry to provide the best facilities for their children. By end of next year, we would be starting our operations there, and other emerging markets that I am looking at are Myanmar and Cambodia. In these countries, parents have been deprived of good quality education and they want to make sure it does not happen to their children. It is difficult to penetrate these markets. It is a challenge and we have to accept it. Indonesia, for example, after almost two years, we are the only education company that got a franchisee licence. In Vietnam, we have been waiting for the last three-and-a-half-years to establish a company. When you cross boundaries, one must be patient.
Singapore has been witnessing a lot of debate as to whether its education system is too rigid and regimental. What is your take?
I am a father of three kids. My children went through the same system. But we did not put any pressure and told them to do their best at every level. My children were slow learners. It is the parents who are putting the pressure on their children. The Montessori environment allows the child to be very independent and free. It is true that our education system may be very structured—but don’t forget teachers are also grappling with the fact that they have limited time and that they also have to finish a set curriculum. I suppose being a small state, we want to make sure we get the best out of every kid. The system provides different routes to kids here—the intelligent ones get a faster route. Parents must understand that the system here classifies kids according to their learning abilities, and that everyone cannot be fast-tracked or take the express route. When parents don’t acknowledge that a child can be a slow learner, they are to blame—not the system or the child. I was a slow learner in class.
As Singapore approaches its 50th independence year, how do you see its future?
I see a great future for Singapore—we are already there at the top. To sustain this success will be tough because many other countries will try to compete with us in the areas and sectors that we are strong. That is the challenge for the next generation. Singapore has to keep innovating to remain successful.
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