My elder brother Rajagopal was a 14-year-old when my father died and he became the breadwinner of the family. My sister and I managed to complete our studies thanks to him,” shares Ram, who at present is the founder-managing director, VETA. This is his story of how he established VETA from scratch and has succeeded in taking it to great heights, all while positively impacting societies across India.
The first step
Through the National Service Scheme (NSS), I taught children from slum areas in the evenings and found it to be very challenging, yet satisfying. I had a flair for mathematics and teaching, and this was a great way to combine both.
In 1981, after completing a Bachelors degree in Physics, I was recruited as a management trainee by The Indian Express newspaper for a monthly stipend of Rs. 750. But my interest lay elsewhere. I wanted to be independent, much to my mother’s dismay, who strongly opposed the idea. I knew teaching was my vocation. And chance favoured my decision – an astrologer advised my mother to heed my way.
As on April 2010, VETA has 250 centres in 140 cities in India in every region. The strategy to grow includes opening 500 three-classroom centres and 2,500 one-classroom centres in two years.
I found an unoccupied bungalow with a thatched roof in Nandanam extension, borrowed money from my mother to pay the advance and spruced up the place. I had three students to begin with. In January 1981, I formally inaugurated Vivekananda Study Circle on Swami Vivekananda’s birthday – January 12th. He is also my inspiration – the reason why I named my centre after him. My first three students brought two more each and the flow began.
All under one roof
Mathematics tuitions were popular even back then and soon, students of class eight and 10 also started requesting for classes. I expanded the tuition area and roped in my brother, who was good at English, and my sister, who was good at commerce and economics, to help me with the classes as there was a demand for all these subjects. In less than six months, my tuition centre was offering classes for all subjects.
While it was doing well, I realised that accessing the centre was a hurdle for many students to sign up. I now had savings of around Rs 20,000 – 25,000 and decided to shift to a more approachable place. I found one on Madley Road, T. Nagar, which is still operational.
I realised that many mistook Vivekananda Study Centre to be a library and decided to change it to Vivekananda Tutorial Centre (Vivekananda Kalvi Nilayam). I advertised heavily in print and personally monitored all the content of our advertisements. I also realised that the weak students needed extra help and all my teachers were instructed not to restrict themselves to the timings, but to go the extra mile, thus ensuring all the students passed. In two years, I had 800 students.
The growth curve
I realised that many students were poor in spoken English and so, I asked my brother to hold classes. Our first batch brought in many more students and that was thanks to my brother’s teaching methodology; with anecdotes, stories and jokes, he made the class interesting even for those who tended to get bored easily. He believes that we learn our mother tongue even without knowing the rules of grammar. So, why not apply the same to English as well? He does not say ‘noun’ and ‘verb’ instead he identifies them as ‘naming word’, ‘action word’ etc. which are simpler to remember.
From the number of people signing up for this course, I realised this was a sure winner. I was 24 then, making Rs. 4 lakh a month, with 80 per cent profit margins. This gave me the courage to ask Rajagopal to quit his job and take this up fulltime. He hesitated but agreed eventually. Being the elder one, I thought it was only appropriate that he should be the principal.
This also enabled me to look at the larger picture and identify growth areas. We increased the number of English classes and I also recorded his classes and created material for distance education. I advertised this in various magazines and got an excellent response, making Vivekananda Kalvi Nilayam a household name. I also organised contact classes.
Next, I aspired to replicate this in Telugu but the traditional method of stencilling and proofing each copy was becoming difficult, so we started printing the material. As the Tamil name made no sense in Andhra Pradesh, we switched names to Vivekananda Institute in 1988.
I did face a problem at this point in time, comprehending income tax. I had no clue about it till I got a notice asking if I was paying taxes. This compelled me to make the institute a private limited company.
Meanwhile, the demand for classes was increasing exponentially. While all the other subjects were popular, I realised that the spoken English classes were generating more than the tutorial income. This prompted me to close down the tutorial segment in 1988 and we became an English language training company.
We were translating in multiple languages and once in two months, hiring a local school for contact classes. By 1995, the institute had a turnover of Rs 70 – 80 lakh, with just 45 employees.
The franchisee route
In 2000, the number of students signing up was coming down and I wondered if we were making a mistake. No amount of print or television advertisements made any difference. At this time, I came across the concept of franchisees and decided that instead of correspondence, we would opt for more classrooms. We appointed a person to handle this and by 2003, the institute had 60 centres with a turnover of Rs 14 crore and over 100 employees. It also gave rise to duplicates which I could do nothing about. Being the only branded player at the national level in this segment, we did not worry about competition. But many franchisees broke free, not wanting to share royalty. Legal battles followed and growth became sluggish.
In January 2004, I asked advertising agency JWT to handle brand management professionally. The first suggestion they had was to rename the institute as VETA (Vivekananda English Training Academy). I also changed the equation with my franchisees. Till then, they were paying me 20 per cent royalty and were supposed to release local advertisements, but this was not happening. I made them equal partners to make them responsible for the quality, their staff and the rent. VETA would take care of local advertisements, provide free study material as well as undertake brand building.
While franchisees in Karnataka were okay with the change, those in Tamil Nadu were not. We decided to go ahead anyway and spend Rs 4.5 crore on promoting the new brand. I got an injunction against franchisees using the old name and the brand promotion also helped establish that VETA and Vivekananda Institute were the same. So, those who broke away assumed different names.
Back to growing
I could now focus on expansion and we shelved the distance education programme. I hired an auditor, who advised me to seek a loan for expansion – something that I had never done before. We first took a loan of Rs. 4 crore and then Rs. 6 crore in 2004 with the VETA head office as the collateral. The following expansion brought private venture equities into the picture and Gurgaon-based SAIF Partners invested in 2007 for further expansion.
As on April 2010, VETA has 250 centres in 140 cities in India in every region. The strategy to grow includes opening 500 three-classroom centres and 2,500 one-classroom centres in two years. In cities with more than four lakh population, VETA has a strategy of opening three classrooms and in towns with one lakh population, one classroom.
We have a 100 per cent subsidiary in Singapore that caters to the South Asian markets and have opened 20 centres in Sri Lanka and 10 in Malaysia in 2009. Others are being planned in countries like Thailand and China, which have high potential.
We are restructuring currently to tap the untapped potential in the market for English language training. Our focus on students, quality of the curriculum and assured results will not change.