The Smart Techie was renamed Siliconindia India Edition starting Feb 2012 to continue the nearly two decade track record of excellence of our US edition.

Experiment and then choose the right business model

Vimali Swamy
Sunday, March 4, 2012
Vimali Swamy
Rohit Kapoor is the President & CEO of EXL (NASDAQ: EXLS), a leading provider of Transformation and Outsourcing services to Global 1000 companies in multiple industries including insurance, banking, financial services, utilities, transportation and travel. Since the company started its operations in 1999, he has held various roles including CFO and President & CEO. Prior to joining EXL, Rohit was a business head at Deutsche Bank and led a marketing team that serviced clients in Europe, the Middle East and the Indian Sub-continent. He also managed the venture capital and private equity investments of several Ultra High Net Worth clients in start-up companies both in the U.S. and Indian TMT sectors. Rohit successfully raised several rounds of venture capital funding for various companies and he was also involved in the structuring of their investments. Earlier, he worked for eight years with Bank of America - five of which were in Private Banking in New York and three in Corporate Banking in India. Rohit holds a B.Tech from IIT Delhi and an MBA from the IIM Ahmedabad, India.

The leap into IT

I started my journey in marketing and product development with Nestle. From there I switched over to banking, with Bank of America in India. Then I was fortunate enough to get relocated to the U.S. to start a new business for the bank. Setting up that business, hiring new people for it and developing it gave me a lot of learning opportunity. It was at Bank of America that I met and worked with Vikram Talwar, and later both of us went on to found EXL. The whole journey has been really fascinating and for the last 12 years, building up a company in the BPO space was a very rewarding experience. My time with the bank gave me the opportunity to be part of several private equity investments and many of these where in IT Services companies. This gave me the initial exposures into this arena, how these companies are setup, their business model, and more. One of the main things that I realized is that IT companies are highly customer centric organizations. They were keen to listen to their customers and providing high value services to their customers with a great deal of care and attention. These companies also were highly flexible. This knowledge helped me a lot in creating EXL as there was not much differentiation that you could create during the early stages of a company. The differentiation would really come through the mindset and the approach the company took towards its clients and whether you buildup a reputation among your clients.

Lesson learnt

Choose the right business model. It is important to note that business plans often change when it comes to practicality. We started EXL as a non voice based processing company. But several experiences and customer engagements later totally changed our business model. There were several incidents that stayed with me over the years. For our first customer what we did was email processing work. It used to cost them $3 per email, while we offered the same at $2 per email, so they made a considerable saving and we made considerable profit. Then dotcom bust happened and the pricing collapsed to a few cents per email. This taught that if you are in the commoditized space of business then the pricing is going to be the sole criteria for decision making and it is not going to be a sustainable business. We lost our entire profit in this and we decided not to go for emailing processing and the call center work. Hiring, retaining talent, development of the talent, and motivation the employees have always remained as an issue. Presently we are facing another serious challenge in the form of volatility of Indian Rupee. This is creating major issues for us in bidding with our customers and managing our expenses. All these issues teach a lot of valuable lessons to an entrepreneur.

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