Taking a scientific decision

Taking a scientific decision

Dhiraj Rajaram, founder and CEO, Mu Sigma, an analytics services provider, has been the poster child of the Indian startup world for a while now. He has now set his sights on building the world’s foremost decision sciences company


While I was doing my research for this story on Mu Sigma, something really interesting caught my attention.  I landed up on the homepage of Mu Sigma and clicked on a link to read about its leadership team. All members of its leadership team fit into one of three groups titled – Brahma, Vishnu and Shiva.  Intrigued, I went on to read about Mu Sigma’s philosophy of creation, preservation and destruction and how the company was inspired by an article, authored by Professor Vijay Govindarajan, titled “Modern Strategy and Hinduism: Finding Parallels.”

Dhiraj Rajaram, founder and CEO, Mu Sigma, says, “The article inspired us to create the Brahma-Vishnu-Shiva groups. Leaders who are part of Group Brahma are focused on creating the future. Group Vishnu is focused on managing the present and Group Shiva is focused on destroying or selectively abandoning the past.”  Rajaram leads two of these groups – Brahma and Shiva.

When the company was founded, Mu Sigma was one of India’s first independent analytics services providers with a delivery center in India. Today, Mu Sigma serves clients in various sectors including retail, pharmaceuticals, and software, among others, helping them formulate better business decisions with a team of decision scientists to solve specific business problems.  Decision Sciences is essentially an interdisciplinary field where a combination of business, applied math, technology, design thinking and behavioral sciences come together to sift vast amounts of data and draw business insights. Rajaram says, “Decision Scientists are not just number crunchers, but individuals who can turn data into context-specific, objective insights.”

The big updates

We last wrote about Mu Sigma in August 2010 when the company employed about 815 people and reached an annual revenue run rate of US $40 to US $50 million. Since then, it has grown at a good pace to employ over 2,500 people. In late 2011, the company closed a US $108 million round of funding from General Atlantic, one of the world’s largest growth equity investors, and the deal was touted as the biggest private equity deal made in the emerging markets for analytics services. (The company also raised US $25 million from Sequoia Capital in mid-2011 prior to this round). Additionally, MasterCard, the credit card major, also picked up an equity stake in the company.

From 2011 till date, the company and its founder have won a series of awards. Most prominent of them all was Mu Sigma’s number one ranking across most parameters in Datamonitor’s Black Book of Outsourcing, which ranks KPOs. This ranking was significant since it beat companies like IBM, Genpact, Accenture, Capgemini and Infosys in several parameters including financial benefits, risk mitigation, partnership approach, corporate reputation, future orientation, skills and resources. Rajaram was also a finalist in the Ernst & Young Entrepreneur of the Year 2012 in the Midwest Region in the U.S.

During this period, the company also has several firsts to its credit. It offered the world’s first certificate in decision sciences from Mu Sigma University, its training arm, that enables people across the world to become a certified decision sciences professional. It also launched a series of products, built around open source tools and used in big data analytics, which it sells for an annual license fee.

Operations and strategy

A core part of Mu Sigma’s delivery team is its team of decision scientists. In line with its strategy of being extremely nimble in client engagements, the company decided to open a delivery center in Austin, Texas.

Krishna Rupanagunta, Client Partner at Mu Sigma and head of the Austin center, says, “The primary goal was to have a 24-hour delivery mechanism in place, with decision scientists in both Bengaluru and Austin. We expect to reach 300 people in Austin in about two years.”

The Austin center will mirror the facilities in Bengaluru and will also include a Customer Lab and Innovation Lab, in addition to the delivery center. Mu Sigma’s Innovation Lab is dedicated to researching capabilities in emerging technologies in the space of analytics. Its Customer Lab is focused on helping Mu Sigma’s customers drive discovery-driven innovation in their analytics initiatives where the focus is on long-term ROI.

Client engagement

Mu Sigma’s primary value proposition to its clients revolves around helping them analyse large realms of data to make better decisions. Rajaram says, “Our engagement starts right from defining the business objectives of our clients, to identifying the right methodology of analytics to generate and communicate insights. And we engage with our clients till we help them in the consumption of analytics.”

“An article by Professor Vijay Govindarajan inspired us to create the Brahma-Vishnu-Shiva groups for our leadership team. Senior managers who are part of Group Brahma are focused on creating the future. Group Vishnu is focused on managing the present and Group Shiva is focused on destroying or selectively abandoning the past.”

Typical of any offshoring company, Mu Sigma too adopts a global delivery model. The onsite staff focuses on understanding client needs and sets the context for each and every project. The offshore teams bring in the people, technology and process that essentially bring in the scale to analyse vast amounts of data and draw meaningful insights from it. In addition to the services layer, Mu Sigma also licenses tools and technology to clients for a fee.

The core of the company’s delivery engine is the decision scientist. Once decision scientist trainees are recruited, they join the Mu Sigma University. Here they go through a continuous learning program where they learn and develop skills along three interdisciplinary dimensions – consulting basics (the art of problem solving and insight generation), core curriculum (applied math, advanced statistics, data analysis tools like R, SPSS Hadoop etc.) and finally, the business concepts for the various verticals and horizontals. At Mu Sigma, the key verticals include retail, banking, financial services and pharmaceuticals and the horizontals include marketing, risk and supply chain.

While most organisations today understand the use of decision sciences and data analysis in a fairly complex world, they also realise that the capabilities needed to do this internally are very different. Over time, Mu Sigma wants to help its clients to include analytics into the loop of every decision-making process. This requires the use of analytics at a completely different scale and that is the reason why they outsource it.

Over the next few years, Rajaram wants to continue on this journey and build an institution that’ll last forever. “We see the following happening in the next few years – geographic expansion into new markets such as Middle East, Africa, South East Asia; increased portfolio of products and platforms; and more strategic partnerships with a range of ecosystem players – data providers and technology companies, among others,” says Rajaram on a parting note.

Then Now
815 employees 2500 employees
U.S. $30 million in venture capital funding from FTVentures US $108 million from General Atlantic, US $25 million from Sequoia Capital, MasterCard picks up equity stake
Deliver center in Bangalore 24-hour team of decision scientists work out of Bangalore and Austin, TX
Global delivery model with onsite and offshore employees Added an additional layer where technology platforms are also licensed to clients
US $40 million – $50 million run rate Revenue undisclosed, but company grew at breakneck pace


Dhiraj Rajaram, founder and CEO, Mu Sigma, shares with us five lessons he has learnt so far from his journey as an entrepreneur

Build an industry, not just your company 

When we spoke to Dhiraj Rajaram in 2010, he spoke a lot about how early-stage startups in a Greenfield industry have to take on the mantle of helping the overall industry grow, in addition to building a company. The logic was that for the startup to progress into a large company, it was important for the industry to mature as well. Mu Sigma was among the first few players in the analytics services industry where decision scientists worked for clients to help them solve business problems. Here, Rajaram gives us a glimpse of what Mu Sigma has done to help with the overall growth of the industry

“We have led several initiatives to help disrupt this industry. One, we’ve spearheaded the need to understand the interdisciplinary nature of decision sciences and how it is the coming together of math, technology, business and behavior sciences. Two, we launched Mu Sigma University to train  a large number of people in this field and even launched a certification program to bring in more talent into the sector. Three, we’ve launched a number of technology products and platforms built on top of open source tools that can be used by the analytics ecosystem.”

A difficult stroke 

We’ve often heard several business leaders talk about how things go wrong because of the inability of leaders to make extremely tough decisions at the right time. Also, there is a thin line between a good tough decision and a bad tough decision.

Today, Mu Sigma operates in a complex environment with widespread competition and tough macroeconomic situation.  In this situation, often entrepreneurs might think a bird in the hand is better than two in the bush. But not Dhiraj Rajaram. Read what he has to say about one of the most difficult decisions he has made.

“In 2008, we had to make a very hard decision of stopping to work with one of our clients, because they were asking for industry exclusivity. At that time the client represented close to 30 per cent of our revenues and we decided not to be pressurised. Fortunately for us, we grew 100 per cent y-o-y that year even after voluntarily letting go of that client. But it was certainly among the toughest decisions I have taken.”

Making a big deal

Off late, in the world of entrepreneurship, it seems like the battle is not only about revenue growth but also who has the ability to raise the ultra large rounds of funding. At least, this is how the media pitches it! In any case, large funding deals also represent the confidence a particular investor has in the startup.


Mu Sigma, raised US $108 million from General Atlantic, in what is touted as one of the biggest PE deals in India’s emerging sector for analytics.  We’ve often seen entrepreneurs, especially at the early stage, modify their business plan to appease investors. We asked Rajaram a tip or two on raising money.

“Be very direct about how you want to build your company and build it the way you like to see it. Don’t try to appease investors. If they like your vision and execution they will invest and continue to be with you.”

Arggggg! That was a bad call 

From our experience of meeting several entrepreneurs, we often observe that the less experienced ones often kick themselves for making bad business decisions. On the other hand, the experienced entrepreneurs and business leaders simply move on asking themselves the question – what next? While this approach requires tremendous intellectual maturity on the part of a decision-maker, it is also crucial to learn from the faux pas made in the past.

Also, what competitors are doing, what the media says and what the experts tout as the next big thing often influence entrepreneurs. Rajaram, on the other hand, was never swayed by what was happening at the market level. He didn’t exit his business because other smaller analytics companies were exiting. He didn’t diversify into other areas because investors thought the market for analytics services was small. Instead, he stuck to what he believed in. Here is what he has to say:

“A number of things don’t go well at Mu Sigma since we are continuously innovating and experimenting. It is important to learn from mistakes and correct course. However, the most important thing is to have a strong belief system around your vision and execution. You have to know when to be unreasonable and when to adapt. Don’t get unnecessarily swayed by market winds. Decide whether you are in the business of changing the market or adapting to the market.”

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