I sat at my desk with two folders in front of me. One held a proposed business plan for Edurite, an educations solutions company I had co-founded two years ago. The other held my resignation letter.
It was August 2002, and Edurite had come a long way since its idealistic beginnings two years ago. Not only had we used all of our seed money, but were also facing a 75-lakh-rupee debt. My options were limited but fairly straightforward. I knew what I had to do for Edurite: cut costs. I also knew when, where, and how. What I didn’t know yet was that creating a new business plan was the easy part. The difficult part was actually implementing it.
Nobody takes the decision to lay off 75% of their workforce lightly. I was hoping to appeal to their sense of reason during individual exit interviews where I would explain the reasoning behind the restructure. Yes, it was going to be uncomfortable, probably even unpleasant, but I had to look at the bigger picture. The company was its own entity, separate from me, the entrepreneur, and I had to act in its best interests. Despite these rationalizations, I could not shake the mild sense of guilt that accompanied laying off some of my long-time employees. I offered each of them 15 days of paid time off to look for another job, and, perhaps unsurprisingly, was met with varied reactions. Some told me that they understood, that they realized I had to do what was best from a business perspective, and they accepted my help. Others reacted viscerally, verbally venting their frustrations. I had made an informed decision and from a practical standpoint, I knew that I was in the right. But entrepreneurship is as much about people as it is about business, and I have to admit that at that point, it was difficult to separate the two. This made it all the more important that I stood my ground. I would have been a big hypocrite if I didn’t count myself as just one of the company’s many parts, and factor in my own costs. I cut my salary by half, and a couple of senior employees followed suit, voluntarily accepting pay cuts in order to stay on and save the business. Getting over that first hurdle had actually cleared the way for other things to fall into place.
Looking back on that day nearly 15 years later, my memory is that people understood. To quote Maya Angelou, “I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.”
Things began to turn around for Edurite only about one and a half years later. The company’s costs decreased, we were able to introduce a small sales force, and revenues began to rise. When around a dozen ex-employees returned out of a sense of loyalty to Edurite, and helped with the rebuilding process, I couldn’t help but ask incredulously, “Why?” One employee’s answer gave me the assurance I needed that I had made the right decision. She credits her experience at Edurite for her personal and professional growth. It taught her to evaluate a situation comprehensively, and gave her the confidence to take risks as needed. My own experience with Edurite left me with lessons I still carry with me today: ones that I am sure are relevant to every entrepreneurial journey, regardless of the field.
So what were these lessons exactly? Well, for me, they came from each step of the process. First, I learned that the product you want to make is not necessarily the product that the market needs. In its initial stages, our company tried to create a product that parents with PCs in their homes would choose to buy for their child. This demographic barely existed in the early 2000s, when PC penetration was only around 2%. A good idea is both innovative and has good timing.
The second thing I learned is that sometimes you need a do-over. You need to be willing to tear down things you built so carefully. The second time around, Edurite went after volume, and we bundled our product with textbooks, Intel processors and even soap to access our customer base. Finally, I was able to appreciate the importance of facing what seem (at the time) to be impossible choices. These choices are the cornerstone of every entrepreneurial success story.
In 2007, Edurite merged with TutorVista. It is currently part of the Pearson Group.
Image credit "ShutterStock"
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