Success story: How Jetking rose from the abyss of failure

Shruti Chakraborty

You could say that most Indian companies were at the cusp of radical upward chance at the beginning of the 90s. The economy was in rubble and the only way for it was up -- the now famous policy reforms were inevitable and entrepreneurs knew that it was not long before they were going to be free from state controls and the conservative mindsets of administrators.

For one entrepreneur though, the next 10 years gave no such hope. The year was 1990 and Suresh Bharwani was staring down the barrel. About two decades ago, his company Jetking had got into the radio business. In 1986, it had also expanded into making television sets under the brand name Jetking Electronics. This was also the year the company was listed on the Bombay Stock Exchange.

That was as good as it ever got. Within four years, Bharwani was at rock bottom. "The television business required huge investments and we had a lot of competition," says Bharwani. The company failed at this business and lost about Rs 3 crore. "We were sued by State Bank of India and Canara Bank, who we had taken loans from," he adds. Bharwani scraped around desperately to sustain the business, but he wasn’t able to raise any capital to pump into it.

With a debt to pay off and no business, Bharwani was pondering over what he could do to bring back the family business formed by his father and freedom fighter Gordhandas Bharwani who had started the business selling war surpluses and wire radios after Independence.

Training With Job Guarantee

Bharwani says that training people was something close to his heart. "I used to train our sales team. We also had the legacy of the do-it-yourself radio kits, where we encouraged people to do things on their own," he recounts.

This gave Bharwani the idea to enter the business of vocational training. Unable to get any bank loans because of the debt, Bharwani borrowed some money from family members and set up Jetking School of Electronics Technology in 1990, which began with an advanced course for graduate engineers.

Referring to a McKinsey report, Bharwani points out that the market for his business continues to be vibrant because higher education in India has failed in the purpose of readying young students for jobs.

"About 72 percent of the youth of this country feel their education has not helped them get jobs."

By 1992, the training business was well on its way. Bharwani changed the name of the company at this point to Jetking Infotrain. He says that his inability to invest heavily in the business got him to consider a different model for growing the business-franchising, something that was new for India and especially the education sector.

By 1997, Bharwani had paid off the debt to the banks, he says. Jetking Infotrain now operates on a hub-and-spoke model and has seven hubs in the country including Delhi, Mumbai, Kolkata and Chennai and has franchisees as spokes reaching into other parts of the country.

The company claims to have trained six lakh students to date through 100 centers around the country. Bharwani says Jetking now gives students a 100 percent job guarantee and places 15,000 students annually.

Right Partners, Right Ways

In an attempt to give the best quality training, Bharwani has focused on partnering with the right people. The company got affiliated to Microsoft in 1995 and was recognized as a Certified Solutions Provider and Technical Education Center by the software major in 1999. It also has academic collaborations with Red Hat, makers of Linux-based operating systems, Watchguard, an internet Security company and Prometric, a test development and delivery company.

On the domestic side, the company has joined hands with the Sikkim Manipal University to deliver a training program. Governments, who are readying war chests to spend on employment training, have been willing partners too. "We have a Rs 50-crore order to train 9000 people in Gujarat," Bharwani reveals.

Jetking is also one of the companies the National Skill Development Corporation is partnering with to prepare more Indian students to be skilled employees. The company has also embedded its hardware and networking courses into college curriculums and is already working with 15 colleges on that front, Bharwani says.

With no debt and little in the way of heavy investments, you could be deceived into thinking that it has been smooth sailing for Jetking. But Bharwani knows that the sector he has chosen will throw up challenges the whole nine yards just because of the scale of India’s problem.

He tells us that India will require 75 lakh trained professionals in hardware by 2020 and 11 lakh more in networking. "A challenge with being in the sector of vocational training is that people look down on it. People think vocational training gets you blue collar jobs and not white collar jobs."

Bharwani points out that there is also a gap as most jobs are in cities while the large numbers of people looking out are based in Tier II and Tier III towns. "Another challenge is the vernacular medium of education," he says.

The company has also incorporated English speaking and personality development as a part of its curriculum to overcome this challenge. He says, whatever the sector and whatever the specialisation, it is important to find ways to make sure students learn better. Using reinforcement techniques, Bharwani says that Jetking ensures that students visit companies and get to see how work really happens.

Looking At A Turnover of 800 Crore in 10 Years

The franchise model has thrown up its own set of challenges. During the economic downturn of 2008, Bharwani says some franchisees were not working well and the quality of training dropped at these centers. This led the company to put a strong quality control system in place and it now has as many as 100 parameters on which it checks the franchisees. The company closed down 30 centers in three years and Bharwani says they will be closing down another 20 centers soon. He states that this was not a case of them being too stringent on the franchisees. During the downturn, the company let franchisees take their time on payments because the job market was tough and not many companies were hiring, he reveals.

Giving more information on their franchising model, Bharwani informs that a franchise owner has to invest up to Rs 30 lakh in setting up a center, which can break even within two to three years.

Yogesh Talati is one such franchisee who owns Jetking franchisees in two suburbs of Mumbai. He tells us that he invested Rs 2 lakh (he already had the space) and now pays a 20 percent royalty to Jetking as well as training charges for the teachers.

The reason Talati looked at opening a Jetking franchise, he says, was because at the time they entered the field, most others were looking at software training. No one was really focusing on hardware and networking-related skills. With Jetking being very system and process driven, he faced few problems in running and setting up the franchise.

Bharwani says that from the Rs 33.69 crore in revenue the company earned in FY12, he plans to take the company to a turnover of Rs 800 crore in ten years. An interesting thing to note here, which is probably a testament to Bharwani’s penchant for planning and processes after the earlier setbacks, is that he knows the exact number of students he will need to train to get to that target. That number is 18,70,313 students -- of which 45 percent will be in the IT sector, seven percent in electronics and 48 percent in the automobile sector.

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