The Right Timing...

"We are a team of two looking to enter the KPO business. I am a medical doctor with a postgraduate degree in hospital administration, with seven years work experience in healthcare management. Currently, I am working as a healthcare analyst. My partner is a software engineer with three years experience in developing various business applications. Both of us come from a middle income background. With my expertise in the healthcare space and my partner’s in the IT space, together we are looking to start a healthcare KPO in either Bangalore or Gurgaon. Since both of us are sole breadwinners in our families, we would like to have your guidance about how to move out of our current jobs slowly and go about our venture? Is it advisable to work part-time? Also, we are also worried about the capital investment needed for this space, since we both earn a salaried income, how do we go about convincing investors to invest in a completely new company?"

Raman Roy Chairman & Managing Director, Quatrro 

Your intention of starting a KPO business is noble and I would encourage you and your partner to actualise your thinking. I would, however, suggest you take a relook at the order and the timing of what you want to do and when. Any business revolves around fulfilling customer needs and, to state the obvious, the objective is to generate sufficient revenues to cover costs and be profitable. Whether it is a KPO or any other business the principle remains the same. Everything in the business needs to be architected to meet the needs of the customer. The competencies and capabilities of the management are necessary but not sufficient conditions. The customer needs (and thus the product proposition) are typically complex and need more than just the capabilities of the entrepreneur or the management. What you need to answer is, what is the product proposition that you have for your customers and what do you need (in addition to you and your friend) to be able to deliver it? How is this product proposition that you are (or will) construct compare with what is already available in the market to the customer and how is your proposition different or superior? In cases where the product proposition is not different or superior, how do you intend to compete with the competition and is the market large to have your offerings in addition to what is available today? Are your price points acceptable to the customer and sufficient to allow you to make a profit to meet your personal objectives? 

As you prepare a plan to answer these questions the answers to what all has to be done and when it has to be done typically starts to emerge? Let me explain. Look at creating a business like cooking an exotic dish. You first need to have some idea of the end result of what the exotic dish is going to be. Then you need the various ingredients for the dish like meats and vegetables of various types, spices and condiments of various types, other garnishing and sauces etc. An expert chef will add different quantities of the ingredients at different times depending on need and what end result is needed. The chef may decide to make a particular dish as he/she has some ingredients available... but he/she still needs to get the balance items based on the needs of the dish. In the same way, for a business you need a combination of skill sets, capabilities and competencies packaged together as a product proposition for the customer who will pay a price for the ‘product’ or ‘service’. From what you state, between you and your partner you have the domain knowledge and capabilities in the healthcare and IT arena. You need to ask what else is needed to create a value proposition for your target customers. Obviously, you and your partner will use your competencies and your knowledge of your areas of expertise and your understanding of the needs of the customer to create this ‘proposition’. You then need to validate the proposition and answer some basic questions. Based on the answers you will modify or fine tune the product proposition. Once you have a somewhat realistic product proposition you will ‘flesh’ it out or ‘explode’ the proposition to determine what all is required in addition to the skills you and your partner bring as also the timing of the needs of all the inputs needed. 

This will form the first business plan for your offerings. The essential content of this plan will be the timing that you and your partner need to follow to join the new venture, the funding needs and the timing of the funding. Some realities: Competency in a particular domain (healthcare and IT in your case) alone do not guarantee a product proposition that will be attractive to the customers and be profitable. A good product proposition alone does not mean it is a business plan. A business plan does not guarantee funding. Funding does not guarantee success. All these are necessary steps... some of these steps are sequential and some can be done in parallel. 

Your questions of whether to work part-time or full-time and how to tie up the funding comes as an out come of this planning process. The product proposition and the business plan can be conceptualised part time or full time. If the planning process is robust then the answer will leap out at you from the business plan itself. The business plan discussed with potential investors will also tie up funding and once the funding is tied up you and your partner will be able to determine if it is worth taking the risk of leaving the jobs and tying up the other ingredients of the product proposition. There are three constituents to a business: customer, employee, and investor. The business plan has to address all three. If you can cater to all these three constituents then you have a good business. I have seen meticulous and detailed plans that lay out week by week what will happen and I have seen “cowboy” shoot from the hip attitude that says ‘we will figure it out’. Both can succeed... The only common element that I have seen is that all successful business have customers that are willing to pay for the services/products. In the end that is all that matters.