How Vijay Pentareddy's perseverance turned a collapsing skill development firm into a startup success storyAparajita Choudhury
The saying goes, “The grass is always greener on the other side.” Truer words cannot be said of Vijay Pentareddy's situation in 2008, when one day he was setting up his skill development firm, Last Mile Solution, and the next slipping into a hellish nightmare of financial crises. With all his investments in financial markets going down the drain, money was fast drying up and family commitments and EMIs were piling up.
Today, with a team of seven trainers, it is not an exaggeration to say that Vijay (46) has overcome obstacles to emerge as a successful entrepreneur, training degree/PG students and corporates. The startup has helped more than 600 students get placed in 60 MNCs including Deustche Bank, Bank of America, Amazon, Genpact, Accenture, Factset and CTS.
In the last fiscal year, Last Mile has achieved a revenue of Rs. 20 crore. In the next three to five years, the company will have 100 training centres in India with each centre generating Rs two to three crore per year. Eighty per cent of our students are from rural background. We are targeting to train 1,000 students per centre.
Startup troubles were not the first time Vijay encountered problems in life. He had gone through hard times during his professional stint when he lost his job at Accenture in the wake of the dot-com bubble. He then joined IT consulting startup Granitar which got acquired by a venture capital company.
Finally when the dot-com bubble burst, Vijay's fortune turned for the better, and he got offers from Infosys, Virtusa, Wipro and other IT companies. He joined Wipro on a middle management role and worked under T.K.Kurien, who is the company's current CEO.
Vijay identified a lacking in the industry when Wipro implemented a project which embraced freshers. It was more noticeable when he had to head a huge project in Europe with employees not showing great quality in their work.
Vijay says this was when he discovered that 90 per cent of the freshers were lacking basic skills in the industry.
He moved out of his project and visited a couple of campus placement drives. But the conventional process of recruitment, which involves monitoring IQ rather than workable skills, disappointed him. He then decided to start up his own venture.
Vijay discovered that many colleges in Andhra Pradesh run training programmes that lacked substance. He started appearing for guest sessions at Osmania University as part of an entrepreneurship development programme. With Last Mile Solution, Vijay envisioned training engineers but he ended up holding training sessions for MBAs. Alongside, he also did some free training sessions in colleges.
Vijay plodded on despite lukewarm response. There was some ray of hope when he managed to snag an appointment with Y.S. Rajasekhar Reddy, the then Chief Minister of Andhra Pradesh. In July 2009, the CM had , come up with some interesting schemes for skill development, so Vijay was excited that he could discuss the same with him. But the untimely death of the CM in September 2009 put him back in square one.
In December 2009, the agitation surrounding the bifurcation of State started. Passion without cash flow is a bad combination to run a business successfully and so Vijay took a hard call and shut down his business.
A new dawn
He, however, wasn't knocked down completely. Vijay gathered patience and remodelled his office and training room with a small computer lab. His office was one km from the bus stop, a feasible distance for students to attend classes. Even the frequent bandhs in the State did not reduce the student turnout.
Many of them were poor students, so I gave a lot of concession in fees.
As the workload increased, Vijay appointed few of his students as interns. Eventually, his institution started attaining success.
To attract the attention of more students, Last Mile Solution initiated a Facebook group called KAIZEN in May 2011. The group turned out to be a success with the participation of 25,000 MBA students, as it provides job updates, interview techniques, counselling and more. The company also facilitated finding jobs for more than 4,000 students, free of cost, through information sharing and counselling.
Vijay followed up this success with college workshops which received good reviews. Soon, Director of IIM Ahmedabad N.V. Ramana heard of the startup and Vijay received permission to conduct his sessions there.
Laws of attraction
In October 2014, Vijay wrote to K.T. Rama Rao, IT & Panchayat Raj Minister, Telangana and Nirmala Sitharaman, Minister of State for the Ministry of Commerce & Industry, seeking an appointment to request the government to subsidise training.
In April 2015, Vijay got an email response from K.T. Rama Rao and a call from Telangana Academy (TASK) office for a meeting with Sujiv Nair, CEO, TASK.
When I presented my idea, the key points which caught the attention of the CEO is that 80 per cent of Last Mile students transformed are from rural background,” says Vijay.
After an hour-long discussion, Sujiv signed a contract with Last Mile for a pilot project called Warangal Finishing School. It is a 10-to-12-week training programme for 100 B.Tech, MCA and M.Tech students in Warangal District, which is about 140 km from Hyderabad. The cost of the complete training per student was Rs 2,000. The project started on August 3.
A good ending
The project ended on a good note, with 25 students getting shortlisted across four IT companies. Seventy-five per cent of the total number of students reached the final round in interviews, 60 per cent cleared aptitude round, and interviews of other students were done by TASK after the training placement drive was completed.
According to various studies done by KPMG and NSDC, India needs to have 500 million strong skilled workforce by 2022. At present, not more than 15 per cent of graduates are employable. Globally, the skilled workforce in South Korea is 96 per cent, 80 per cent in Japan, 75 per cent in Germany, and 70 per cent in Britain. Compared to this, the skilled workforce in India is only two per cent.
The market is huge and the need is large, but Vijay will need to start investing in technology to scale up.