In 2001, along with a few batch-mates from IIMA, Sridhar set up EI with an aim to create a school education system where children learn with understanding as against the currently dominant learning by rote. Sridhar firmly believes that this goal can be achieved through a 'for profit' enterprise focused on assessment tests for children based on research-based methodologies.
Educational Initiatives’ Sridhar Rajagopalan
Ahmedabad-headquartered EI's flagship product ASSET (Assessment of Scholastic Skills through Educational Testing) is a diagnostic test which, instead of trying only to find out how much a child knows (or has memorized), measures how well a student has understood concepts and gives detailed feedback on the same, to help them improve.
EI recently received Venture Capital from Bangalore-based Footprint Ventures, Chennai-based IFMR Trust and US-based Novak Biddle Venture Partners. Industrialist Gautam Thapar has also invested in his personal capacity.
Sridhar shares his views on education as an enterprise in a conversation with Venture Intelligence’s N. Sriram. Excerpts:
VI: Are you planning to get into segments beyond assessment? Or will you stick to assessment and go for a larger footprint?
Sridhar: We will develop products and services based on research and assessment that will do three things: one, measure how children are learning; two, gain and share insights and information about the learning process – understanding what children learn and what they do not and why, etc; three, improved self-learning. In the third area, we have just launched a product called Mindspark. If a child spends the recommended time on Mindspark every day, learning does happen on its own. Mindspark is able to do that because it is a research-based product.
We plan to develop deeper expertise in the crucial but much neglected area of assessment and develop products. Our research into assessment gives insights into learning. Some of the products might look like learning products but they come out of our expertise in assessment. So we will stay in assessment in K-12.
VI: Will your assessment products evolve as parallels to exams by boards like CBSE or ICSE?
Sridhar: We are working with CBSE. They invited us to see how critical thinking skills can be built in CBSE and if the board can do an assessment and get back to schools and teachers on areas of weaknesses and strengths of the children in a school.
VI: Education appears a hot sector for investors. But is there a gap between where the money is actually needed and where the money is going?
Sridhar: There is a gap because there isn’t a great understanding and also because most players are looking at short term returns. The real win-win will come when we look at these two things together: what is going to fundamentally make a difference and what is the value-add we can make there?
But things are beginning to happen. Intelligent people are becoming interested in the issues. Many people from top institutes such as IITs and IIMs are getting into education.
Today, if someone is trying to better science in schools, he won’t get much venture funding. This may change in the next 3-4 years. But interestingly, when you work on fundamentals, if one product doesn’t work, your fundamental work is strong enough to modify it into something else. In contrast, if you are investing in tutorials, if that is not working, you look elsewhere to see what the ‘in-thing’ is.
VI: Does the Indian education segment have a global role?
Sridhar: I think India has the opportunity to be a global leader in providing educational services. I am surprised that despite our short experience, we are doing things which others elsewhere in the world are not doing. We already have global customers for our products and services.
VI: Do your investors share your vision?
Sridhar: Even in an area like this, the commercial model is the best. We ourselves have set fairly rigorous business targets. For a product like Mindspark, a year before it launched, we decided how much business we want to do in the third year. It is not like we will start Mindspark and see how many we can sell. I don’t think that works. We explain to investors what we are trying to do, why we are trying to and what the larger vision is. We need to recognize that investors are looking for returns on their money. And we need to better that.
VI: Can we say that your enterprise is a proof of concept for good education being a profitable enterprise?
Sridhar: I strongly believe in that. I also think that ‘For Profit’ schools should be allowed to run. However, profit should not be the direct motive. Innovation and quality should be. Profits will certainly follow.
VI: What have been the key contribution of your investors?
Sridhar: There has been value addition in a number of ways. For example, we are now measuring stickiness very carefully – measuring factors like ‘what is the number of children who are taking ASSET year after year?’ very carefully. For example, we have been told that for a product like Mindspark, one of the best markets would be South Korea. Whether or not you do those things, thinking on those lines helps. And issues like how education companies have moved in the US, what they have done right and what they have done wrong…our investors help us with perspectives on these issues.
VI: What is your advice to entrepreneurs in education?
Sridhar: Be very clear about the fundamental goals that you are working towards. Do a very, very strong job on that. And don’t compromise on that. Look at the profit as secondary to the basic goals you are trying to achieve. We have rejected commercial propositions that were not in tune with our basic objectives. I think it is important for businesses to draw the line and declare that we want to do the right things, the right way. At every step, check if that is in tune with your objective. Would your company’s existence help the larger world? If your answer is, ‘yes, it would’, then you could be probably on the right side.
VI: Do you have any role model?
Sridhar: Vikram Sarabhai. He was a great institution builder. He set up IIMA and was the father of India’s space research programme. He was also a businessman. He comes the closest to a source of inspiration.
VI: Your key learning in running a business so far?
Sridhar: Learn from failures. Look at Microsoft Office. It is a successful product. I remember the first product they released. It was absolutely terrible. But they persisted. Think of an idea, persist with it. You will always have successes and failures. Work through the failures and try and get things right. In any business, you will have successes and failures in fairly uniform measure. The key question is whether you can learn and align your learning with the larger goal.
Secondly, people are critical. You basically work through people to get to the goals.
(You can download the full text of the interview here.)