By Shonali Advani
It’s often noted that the best union between co-founders occurs when their skills complement and not mimic each other. Gautam Munshi (36) and Pavan Bhat (35) are co-founders pretty much in the same mould, even though they have one crucial commonality-their love for analytics.
All about analytics
Founders of Bengaluru-based Redwood Associates, Munshi and Bhat have their individual strengths in ideation and operations respectively. Started as a consultancy company in April 2008, Redwood provides services in market analytics. The duo once worked at Marketics Technologies (also an analytics entity), post its acquisition by BPO firm WNS in 2007. Today, they have built a product of their own, Lookbeyondresumes.com (LBR), a platform that seeks to match employers and job seekers, but there is much more to the website than being a mere job portal.
The engine uses analytics to help employers evaluate candidates based on pattern-recognition and thereby help prospective employers make faster, smarter hiring choices. “It’s about effectiveness more than efficiency,” says Munshi, CEO, Redwood Associates.
Currently, Redwood has a B2B model and it is in a pilot with seven multi-nationals. “On an average, we’ve achieved over 80 percent accuracy in predicting performers and non-performers,” says Munshi. In a month, it hopes to have these seven companies formally signed in.
How it works
Redwood’s patent-pending technology works like this—once a corporate registers an account, they can upload any of their assessments, required to evaluate candidates. “We take resumes of 30 top performers and 30 under-performers from our client’s organization; 30 being a statistically valid number,” explains Munshi, also the client-facing guy.
The intelligence (software) learns from the data fed in, throws up results to showcase potential performers for the desired function or position the organization is seeking a candidate. “Once you enter the data into the system, the engine understands the criteria for being a good performer or not,” he highlights.
Then they collect a random sample of 20 resumes of candidates whose performances they don’t know. If the model predicts their performance with over 70 percent accuracy, it’s implemented with the client. The parameters that companies look for, in potential employees (risk and goal orientation, flexibility) can be customised for a client. The platform can be linked to an organization’s website, capturing all resumes uploaded by job seekers. “Using LBR guarantees you 90 percent performers because you’ll hire the right people,” states Munshi.
The platform’s efficiency is a result of two years of R&D (2008-2010), during which Redwood Associates functioned as a pure consultancy firm, parallel to which it ran Analytics Training Institute (ATI), as a fully owned subsidiary of the parent company.
The founders ensured the company survived this phase; thanks to the slowdown, they decided not to seek clients in the US. “The sales cycle would be long and the expenditure higher, which would then lead to a faster burnout,” Munshi says.
Bootstrapped to date, it has sustained itself in this phase with a sound set of clients, mostly Fortune 500 companies. Like Lenovo, a maiden client that Redwood Associates secured in a competitive bid in 2008. The project involved predictive modelling for B2B purchase cycles. “They were nimble-footed, eager to please and we were demanding as a customer. They gave good results and there was no looking back as they won higher value projects from us,” says Siddhartha Roy, Ex-DGM at Lenovo.
ATI, which trains corporate and individuals too sustained itself and today trains corporates and individuals. “Most companies will have a big data strategy now-IT savvy firms in Bengaluru anticipated it four years ago,” points out Munshi, who got hooked onto it at his first job at Standard Chartered’s Business Intelligence Unit. “Analytics is going to become all-pervasive and will be the biggest industry globally,” he opines.
The duo was always convinced of the infeasibility of scaling a service model given the environment over the last few years. “The output-input ratio in the services business was less. We couldn’t do it or see it becoming a billion-dollar enterprise,” says Bhat, COO, Redwood Associates, who is also the hands-on person in the business.
LBR was the answer, though it was born after a failure as a developing product in 2009, when they experimented with facial analytics, but didn’t have the competencies to scale up from concept. “We put cameras in stores with the idea of analysing buying patterns through facial expressions. This is how we invested our time in 2010,” recalls Munshi.
Exploration to insight
But the travails of 2010 helped them realize that building a product wasn’t an overnight job. “The idea was to take something at a lower value, process and assess it, to give it a higher value,” says Bhat, adding that they put all their profits into building LBR. Thanks to its training institute, they had enough data to analyse how people search and choose jobs as well as the hiring criteria of corporates.
The effort was worth its time. Their anchor client, Madison Business Analytics, (unit of Madison World), used Lookbeyondresumes.com to recruit analysts and software professionals. “This is a revolutionary product to attract talent that fits well with the organization. There aren’t many competing products with same level of quality of service, and their pricing is reasonable too,” says Nagaraj Krishnamoorthy, Vice-President, Madison Business Analytics, happy with the team’s flawless execution.
Currently, the platform works with high-volumes-companies with a minimum of 400-500 employees. However, LBR can be plugged into other job portals. “Once fully operational, LBR will be one of the most significant developments in the HR community. It’s not a HR product but a business enhancer,” says Prasenjit Ganguly, Advisor at Redwood Associates.
The revenue model for the company is based on a fee per function system, ranging from Rs.5-10 lakh per year. By year-end, the founders may look at using LBR for other use cases like appraisals, after it secures 25 clients, one in each sector. “Right now we won’t do it, as it may bias the model. There are multiple causalities to a pattern-the software requires time to build accuracy,” explains Munshi.
Between October to December this year, the company will work on the B2C component of its model, whereby job seekers can upload resumes, and see which industry is suited for their growth. Word-of-mouth has led to some traction here with 30-40 daily uploads, though they are still working out a strategy. “The potential for LBR is high and goes beyond geography or sector,” notes Krishnamoorthy.
Redwood’s currently grappling with the challenge of getting corporates to buy into the concept, and assembling the right team. For the latter, they are using LBR.
“HR divisions are sceptical on an analytically-driven method of recruitment and are taking time to sign up,” says Munshi. Speaking on the hiring strategy, given that the firm will hire 50 people by year-end, Munshi says, “There’s no difference between choosing a co-founder and team member when scaling up. The principles remain the same.”
The founders are hopeful that they will overcome the challenges coming their way now and ensure the right jobs go to the right candidates.
Entrepreneur India October 2012