“Vision is perhaps our greatest strength… it makes us peer into the future and lends shape to the unknown.”—Li Ka Shing, a businessman from Hong Kong.The story behind how the founder of Koenig Solutions came up with a radical business model, to turn a struggling training and certification institution into a profit churning multi-city entity, may interest many existing or wannabe entrepreneurs. In 2000, when the dotcom bust hit the IT industry, entrepreneurs running the IT training and certification businesses also felt the heat.The options were either to quit and save themselves from further losses; or to tie a knot at the end of the rope, hang in there, and look for opportunities in the middle of the crisis.
Rohit Aggarwal, founder of Koenig Solutions, chose the second option and decided to not only stand firm in the face of this onslaught but also emerge out of it stronger. Driven by his vision to make a success out of his hard-hit IT training certification business, he decided to explore new options and innovate around the existing set of resources.Supported by a team of dedicated professionals, including the current general manager, Sandeep Dhawan, he decided to downsize and focus only on the profitable niches. On analysis, the team discovered that,occasionally, foreign students attended courses at Koenig. The company saw an opportunity to make extra bucks by bundling travel and hospitality with its core teaching and training offerings.
The turning point
This was an experiment that worked well for Koenig. The team bundled a hotel tariff in the course fee, and began making money on commissions from the hotel where the students would stay. “Although it was a miserly sum of Rs 200 per day, it seemed like a princely sum to us in those days,” recalls Aggarwal. The first student who opted for this courseplus-hotel package came from the UK in 2002. “He was happy with our solution and agreed to become our referral in the UK. This encouraged us. Foreign students started coming in regularly, albeit in small numbers. Since these students saved a lot of money compared to training in their own country, they were quite happy,” he adds.
At that time the team felt that if the institution could get 10 students every month, it would be a great achievement. This target was achieved in 2004. “Soon the true potential of offshore training started to dawn on us. We set a target of 100 students per month, which we achieved in 2009. We are now targeting 1,000 per month, which is to be achieved in the next few years,” shares Aggarwal.
FOSS certifications: Trend-spotting
Since Koenig Solutions has been in the business of FOSS and Linux certifications and training for over 15 years, we requested Aggarwal to share a few details regarding the demand that exists in this domain, and the factors that are propelling this demand.
Aggarwal observes that there is a growing demandfor FOSS skills. “Keeping this trend in view, we have progressively increased our training portfolio for FOSS and we plan to further enhance it in the coming year (e.g., with Zend PHP certification).” RHCE remains the most sought after certification in FOSS. LPI certification (which is now supported by Novell) is also gaining popularity, besides MySQL/PHP skills, which are also in demand, he adds.“We have been offering training on Red Hat Linux since 2004. As of today, we also offer training on Novell(SUSE) Linux, Solaris, Ubuntu, LAMP (Linux, Apache,MySQL, PHP) and LPI certifications. Our training and certification on Linux and open source technologies has been growing by 50 per cent, year-on-year, and we expect this trajectory to continue.”
Blending tourism with training
Initially, Koenig’s business idea was to save costs for its customers. Tourism was not a significant aspect of its value proportion. But in 2004, based on the feedback received from its customers, who liked this unique blend of tourism and study, it decided to strengthen this aspect.Going forward, some students remarked that Delhi was not the ideal place to study because of its traffic, noise and summer heat. This prompted the team to open a centre in Shimla. Then another centre came up in Goa, in 2005.
Talking about the key factor that has helped shape the Koenig growth story, Aggarwal says: “The success of our business depends upon ensuring that our customers have a hassle-free stay in India. We have developed strong relationships with reliable and customer-oriented vendors and hotels in India, and most of our customers recommend India as a tourist destination to their friends and colleagues.”
Surmounting challenges But success didn’t come easy to the team. Aggarwal recapitulates those days when, compared to western standards, the institution’s infrastructure and facilities were ramshackle, with even computers being obsolete. But there were a few things that kept Koenig ticking. “The trainers and staff kept going with full motivation. The students liked the concept of the ‘one-on-one’ training that was imparted,and also the abundant attention that they received from the administrative staff.”
Over the years, Koenig improved its services. “Thefacilities and computers became state-of-the-art and comparable to the best in the world,” says Aggarwal.
A business model that may grow, dramatically!
Offshore training is a novel business idea that Koenig has pioneered in India, claims Aggarwal. He feels that the concept has the potential of evolving into a full-fledged industry. He explains: “We are diverting clients from other countries to India and, in the years to come, this will be another business on par with today’s call centres, BPOs and other ITES (ITenabled services).”
Aggarwal takes pride in several other innovations that Koenig has come up with over time. “The concept of ‘oneon-one’ training and the holiday-cum-training are the key innovations. Apart from this, we constantly upgrade our facilities and innovate in the HR processes (which are critical to retain the best IT talent) to meet international standards. In fact, as of today, our students prefer Koenig primarily because of quality. Cost is a secondary consideration.”
For budding entrepreneurs who wish to set up a training and certification business, Aggarwal has a few words of advice: “Focus on quality. Far too soon, service providers fall into the trap of seeking short-term profits, thus compromising on the quality of their core offerings. Though there is no dearth of training providers, there is a virtual vacuum for businesses that deliver superior quality that’s beyond their price point. So businesses that are paranoid about quality will always do well.”
“A service provider determined to ‘wow’ the customer and continuously innovate to meet the customers’ latent needs cannot but be successful in the long run,” he asserts. And, we agree!
Great article..it shows how a simple integration can impact the business in greater way…