Johnson School alumni Sudeshna Datta, MBA '95, and Anil Kaul, MS '94, PhD '97 are cofounders, along with Suhale Kapoor, of AbsolutData Research and Analytics in Alameda, Calif., a marketing research and analytics company they started in 2001 that now employs 200 and counts several leading companies among its clients, including GM, McKinsey, Kraft, Discover, and Staples. Kaul is AbsolutData's CEO, and Datta is executive vice president, process migration. Cofounder Kapoor runs the company's operations in India.
Datta and Kaul have always been fascinated by the idea of becoming entrepreneurs and knew when they were Johnson School students that they wanted to start their own company one day. In fact, "Sudeshna's essays for Johnson School explicitly mentioned that she was expecting the Johnson School to give her a foundation and training for starting her own company," notes Kaul.
After gaining several years of experience in marketing - including Kaul's consulting experience at McKinsey, where he had the chance to closely study a number of successful organizations, and Datta's brand management experience at Kraft - the opportunity appeared ripe to leverage the lessons they had learned and forge ahead with building a successful company of their own, one that would combine all the best practices they had been exposed to. And they would do it by tapping into a resource that was underutilized at the time: a highly educated and low-cost workforce in India.
"We saw a great, untapped opportunity in leveraging India-based resources to overcome a number of pain points that clients typically had in the marketing research and analytics delivery process," notes Kaul. "This was a very novel idea at that time, as this was much before outsourcing and its various forms had become a buzzword."
In effect, Datta and Kaul were pioneers in the Indian business process outsourcing model so prevalent today. Drawing on Datta's and Kapoor's earlier experience of employing a team in India to develop the Web site for an Internet startup, as well as Kaul's experience in marketing research and analytics, the three entrepreneurs launched AbsolutData.
Below, Datta and Kaul explain their business delivery and growth strategies, emphasize the importance of networking, describe a couple of recent projects, and share what they like best about their jobs.
Q. AbsolutData's Web site claims: "We deliver value to our clients by delivering Better Marketing Intelligence, Twice as Fast at Half the Cost." How are you able to do this?
Kaul: We deliver better marketing intelligence by using a combination of sophisticated analytics, an experienced and talented team recruited from top schools and companies, and our proprietary delivery methodology. Faster speed is achieved by leveraging global resources to run a 24x6 operation, automating as many tasks as possible, and by developing robust processes that do not breakdown under time pressure. Finally, our low cost is based on the structural cost advantage that we have because of our India team and by focusing on every small detail to develop cost-efficient delivery processes.
Q. What are the primary reasons your clients select you vs. your competitors?
Datta: AbsolutData has pioneered an innovative model for delivery of market research and analytics. By bringing together a strong and experienced front-end delivery team in the U.S. with a talented and efficient delivery team in India, we can deliver marketing insights to our clients better, faster, and less expensively. While there has been a lot of innovation in techniques and technology in the past 20 years, no company had looked at the market research and analytics delivery process. Additionally, we have built a lot of flexibility in our business processes that allows us to serve our clients for smaller projects (some as small as $2000) as well as for larger projects (some as large as $750,000). We tend to develop a close partnership with our client teams because of the constant interaction we have with them. In fact, sometimes, we have been surprised by our clients when they have sent cakes and gifts to our teams in India.
Q. Your former employers, Kraft and McKinsey, are among your current clients. What role has networking played in building your client base?
Kaul: Networking has played a very big role in building our client base. For the first five years, we did not have a formal business development team because we were able to get all our clients through networking and word of mouth. Our first client was someone who we had worked with in our past jobs and it took us only 15 minutes in the meeting to get our first project. By leveraging our network, we always came heavily recommended to potential clients, which made our prospect-to-client conversion ratio very high. Now, that we have a client development team, we are again able to leverage the network and our current clients to provide strong references to our prospects.
Q. What are the most interesting research projects you've done for clients?
Datta: We recently helped a music company identify its most valuable customers. Like many music companies, the company management assumed that its most valuable customers are hip 25-year-olds. We leveraged our analytics capability to identify the company's most valuable customers and followed that with market research to profile these customers. Surprisingly, we found that the most valuable customers for the music company were in their 40s with kids. This resulted in a complete change in the company's marketing efforts. We were very pleased to recently see an ad from the company that shows a family enjoying music rather than young people, which they used to show in the past.
We recently helped an online start-up in the social networking field develop its pricing strategy. In the first 3-4 years of its existence, the company had not charged anything to its members. In order to remain a viable entity, the company needed to charge its members. This was a do-or-die decision for the company because if the company charged too much then its customers could migrate to competition, while if it charged too little, there would not be enough revenue to survive and grow the company. We worked closely with the company management to identify the price point at which the company could balance its revenues with keeping a large proportion of its members. The great news is that the company is profitable and thriving. We just concluded another project for them to identify ways to increase the conversion of "free members" to "paying members."
Q. Your Indian office, and the operations end of your business, is in New Delhi. How do you deal with staff retention in India, where there is such high demand for - and high turnover among -- educated workers?
Datta: I head the HR function at AbsolutData, so this is a topic that is very close to me. Staff turnover is a big issue affecting almost every company in India. Currently there are significantly more jobs available than the number of skilled and experienced people. While we were doing all the basic things that every company does - competitive salary, good working conditions, good benefits, etc., we wanted to take this a step further by using the same approach that we use for working with our clients. We started off with understanding the needs and perceptions of the AbsolutData team through an online survey. The survey used an advanced analytical technique called conjoint analysis to identify the value our team members put on various job aspects. For example, we found that constant learning on the job was valued more than an increase in salary. Similarly, we found that we were not doing a great job of communicating future career path to many of our team members. By using this feedback, we have been able to design internal programs that are helping us reduce staff turnover.
Q. What do you like best about your jobs?
Kaul: I think the best part of my job is the variety of things that I get to do in this role on a daily basis. I am sometimes working closely with a client to resolve their thorny business issue; at other times, I have to think about how are we going to manage the finances for a planned IT infrastructure expansion. By nature, I enjoying dealing with such diverse topics and it keeps me excited throughout the day.
Datta: The best part that I enjoy is being able to bring my U.S. and India experiences together in a productive way. I grew up in both India and the U.S. This role provides me an opportunity to be part of both countries while enjoying the best of each. India provides the excitement of building a whole nation at a rapid pace while the U.S. provides the opportunity to dream of doing the unthinkable.