My unabashed advice to every entrepreneur is that your first hire must be Head of Product Development. I reached this common-sense conclusion after making all possible start-up mistakes I could make over four-years and more importantly, a precious One Crore technology blunder! The miracle is that I still live to tell the story.
The Emperor’s New Clothes
In early 2007, as I transitioned from being CEO of WNS Knowledge Services (a Division of WNS Global Services, the first Indian BPO to list on NYSE) to Founder & CEO of Aspire, it was clear to me that technology will play a critical role in process management, intellectual property creation and most importantly, in scalability and profitability. What I did not know was the way to go about this. The first cheque I signed in June 2007, ahead of the business launch on 1 July 2007 was an Advance to a technology services company to help build a technology platform “TracHire”, which was to be the backbone for our flagship product, “NeoHire”.
The brief to the Firm was clear. Aspire was going to solve the industry and nation’s foremost problem: skills development. We believed we had intellectual high-ground as our business model (on paper) was robust. We believed that the three challenges facing Human Resource Managers- high attrition rates, wage inflation and talent scarcity could be resolved the same way as Manufacturers resolve their supply chain challenges: using Automation (MRPs/ERPs) across their Tier 1, Tier 2 and Tier 3 suppliers; using Research & Development to re-engineer supply chain processes and drive efficiencies through the system; and, measure value creation through “Total Cost of Ownership” or TCO methodologies.
I firmly believed (as I do now) that Aspire can address the challenges for talent-intensive corporations by building “human talent supply chains” which would extend to the mines of talent across India- schools, colleges and universities in Tier 2, 3 and 4 cities. Aspire would deliver a multi-tier training model: general employability training inside colleges, pre-process and process training inside regional Aspire academies and final product trainings inside corporations. Talent would flow seamlessly to the Employers. This product was named “NeoHire” and the technology platform “ProHire”.
We were on a high. We had an INR 2.5 crore order even before we launched. Every corporation we spoke with got excited. I approached 35 CXOs for angel investment- 28 chose to invest. We also got a VC and including my savings, we raised 20 Crores. Doing this on the heel of three successes of building McKinsey Knowledge Centre (McKC), FreeMarkets and WNS (last two listed successfully) made me over-confident and I believed I could do no wrong. I ignored the advice: “Fools rush in where angels fear to tread”. The Emperor had new clothes.
The Emperor orders a “Taj Mahal”
I prepared to conquer India with two set of resources. One, my crown jewels- a group of passionate start-up staff, with commando mindset from Day Zero. And second, an “insourced” General, CEO of our partner technology services company I had come to trust blindly over the years. The former created an eleven-page Requirements & Specifications document with process flows for TracHire which the latter started to develop. Under the contract, the vendor would develop the software on its proprietary .NET platform and providing hosting, administration and support services. While we had visualized the process screen by screen, the real-market dynamics turned out to be different. We did trail-and-error in the marketplace, in real time and this reflected in constantly changing specifications and moving targets.
TracHire, as initially envisaged, was to monitor a candidate from the time he contacted us with an Enquiry, was Registered, Assessed, Selected and Enrolled (ERASE). The candidate would then train in one of our four regional training academies before being evaluated by the Employer and placed.
We had got the customer need and process right. We also got the assessments right with our multi-attribute online diagnostic test called NEST (National Employability Skills Test), which was a huge differentiator. We were able to benchmark every candidate with his cohort in the same class, university or country. We could also benchmark the candidate with Employer’s “required” scores on the same attributes creating a neat pre-and-post assessment. But that’s where the list of Rights ended.
On hindsight, TracHire was our Taj Mahal. We learnt several key lessons building this ivory tower:
- Put the horse before the cart: Without a Product Development Head, our ivory tower was built because we had Blind lead the Blind and I personally wore opaque blinkers. We did not have an established business model, processes and requirements. Writing specifications for a business model which kept changing turned out to be our waterloo.
- Caveat Emptor or Let the Buyer Beware: We quickly bought “Rapid Application Development” using our vendor’s proprietary BPM (business process management) engine on .NET, assured that it will take a fraction of time and cost. A complete TracHire was elusive till the end.
- Diversify Risk: We decided to outsource development, hosting, administration, support and maintenance to one Firm to make it attractive for him to serve us. Despite being a management accountant, I forgot the basics of audit and we put all our eggs in one basket.
- Start Small, Think Big: As we had customers, we decided to do a big-bang All-India launch, doing no pilots and started on Day 1 with our “Talent Scouts” in over ten cities. We did too much trial-and-error and re-writing of processes as we learnt on-the-job which was expensive and fatal.
- If it’s too good to be true, it’s not true: One of our TracHire USPs was meant to be a Voice & Accent Testing tool, which nobody in India had built till date. Few international products like Versant are very expensive. Our vendor convinced us that he could build the product. Phew!
- Keep it simple; do not over-engineer: Several of our features like Video CVs, Online scheduling of assessments, Weekly candidate progress report inside Training Academies, etc. were never used by our customers or our own staff, who preferred Excel spreadsheets. In six months, we had 20 pages of over-engineered specifications, never to be used in real life. Ignorance is bliss.
Aspire ran into rough weather with the 2008 recession and with layoffs common, recruitment was passé. We changed our business model on its head to serve the Educators as the prime customer; not the Employers. Aspire 2.0 was born by December 2008. Suddenly, “TracHire” appeared redundant.
A Royal Cat with Nine Lives OR Old Wine in New Bottle
Aspire 2.0 resurrected Aspire and an unlikely “TracHire” turned out to be a royal cat with nine lives. We created two versions of TracHire- Business Edition and University Edition with eight (and later six) modules in each. Our assessment module and especially “NEST” continued to be a big hit. It served us well during the two years of Aspire 2.0 from 2009-2011. We delivered about 100,000 assessments over this period (sometimes offline during bulk testing).
However, the recession caught up with our vendor as well who went through a rough time during this period. He missed deadlines and promises. Despite challenges, he did his best and did not eject. We too evaluated through independent audits and dropped options to change vendor due to our long history. We worked with our vendor till “TracHire” died in 2010, three years after it had started, not before an eloquent swan song.
TracHire was clearly a bridge between Aspire 1.0 and 2.0, helping us secure Educators as customers by using the ERASE process for student marketing, student enrollments and fee management. Infact, we ended up selling several modules of TracHire University Edition. Our core business grew from ~2800 students in 2008-09 to ~12,700 students in 2009-10 and ~25,000 students in 2010-11 while customers grew from 18 in 2008-09 and 2009-10 to 40 in 2010-11. TracHire supported the growth despite bugs and deficiencies. Until a 2010 accident, when we lost student data to be used for their final assessments. Murphy’s law came true: To err is human, but to really mess up, you need technology. With nowhere to hide, since then, TracHire Rests In Peace.
Today, Aspire is a growing start-up as an Embedded Employabilty Education firm. NeoHire is long gone. All new Aspire products have Global Certifications: ProHire and EnglishPro with University of Cambridge (ESOL Examinations); ITPro and RoboticPro with iCarnegie (subsidiary of Carnegie Mellon University); and, MBAPro with Harvard Business Publishing (subsidiary of Harvard Business School). Our products are still enabled by technology: our new Employability Education Management System (EEMS) which includes online learning management, elearning and assessments (e.g., NEST). Perhaps, old wine in new bottle. The decision to move to a US-headquartered, professional, Learning Management System (LMS) was made after evaluation of all opensource and proprietary platforms. We involved two former CTOs from IBM and SAP in making this decision as well as our Bangalore-based consultant. Our new COO, Alok Jain (formerly VP-Training at Wipro) led the decision. The best thing I did was not to interfere.
Despite our roller-coaster ride, the customers never experienced the weaknesses of our software. People processes more than made up. Our Student Satisfaction Ratings were 3.5 on 1-4 scale both in 2009-10 and 2010-11. On the same scale, our Customer Satisfaction Ratings grew from 2.8 to 3.2 over the same period. Aspire was declared “Education Czar” by Mint (2008), adjudged finalist of the John P. McNulty prize (2010), and profiled as “Who’s Next” by Fast Company (USA, 2011). I owe it to our founding team members who with commando-styled brute force overcame technology and business challenges, despite a blindfolded CEO. Thanks to them, NEST and good luck, Aspire continues to enable Educators, Employers and Employees to Grow More.