 "Not your average B-School: Sunstone's MBA will help you face real corporate challenges")
When private equity major Apax Partners acquired US-based IT outsourcing firm GlobalLogic for about Rs 2,100 crore ($420 million) last year, its founders Rajul Garg, Sanjay Singh, Manoj Agarwala and Tarun Upadhyay suddenly found themselves thrust into the limelight. Touted as one of the biggest exits by Indian founders, the deal brought to a close a long cycle of starting up, creating a successful company and exiting it.
“GlobalLogic had taken a life of its own with a lot of investors and stakeholders. We had raised about $50 million cumulatively over the years and it was a formalized board. We had to do something - either go public or get acquired to get to the next level of funds and growth,” says 36-year-old Rajul Garg.
Garg, an IIT-Delhi graduate in Computer Sciences, became an entrepreneur almost immediately after passing out in 1998 when he started Pine Labs, a player in the domestic transactions space. His friend from IIT-Delhi, Tarun Upadhyay, joined him and the company was formally incorporated towards the end of 1998.
“We ran that company for a couple of years and saw moderate success. We then met Sanjay Singh and Manoj Agarwala, who were about 7-8 years my senior at IIT-Delhi and were working at Wipro. Theywere thinking of starting something of their own and we wanted to do something that was US-oriented. The four of us got together and started what was then called IndusLogic and later GlobalLogic in 2000. We made Pine Labs a subsidiary of IndusLogic and started focusing
on international business,” says Garg.
For the next few years, GlobalLogic grew at a very fast clip and raised venture funding as early as the end of 2000 from Draper Atlantic (now New Atlantic Ventures). Since Pine Labs was still doing domestic transactions, in 2003, it was decided to divest the business. By about 2006, the company comprised of 700-800 people. It was profitable with revenues of $12-$13 million and it decided to raise another round of capital.
“One of the ways to grow, that we had identified, was through acquisitions and for that we raised Series B from Sequoia Capital and I became the head of all our M&A activities. We did three acquisitions - in Ukraine, Nagpur and China - under me,” says Garg.
Moving on
By the time Garg had completed about ten years at the job, he wanted to do something different.
“GlobalLogic had become a fairly professionally managed and this created an opportunity for the founders to do something else. The company was not dependant on us,” says Garg. He left thecompany end 2008, at a time when it had grown to employ 4,000 people globally.
While Garg was still a shareholder at GlobalLogic, his plan was to do something India-centric this time. “I spent a year on the venture side where I worked with Sequoia and then moved on to a fund called Aavishkar in 2009. I was given charge of Gujarat and Andhra Pradesh and also of investments in the education sector. This is the first time that I really understood the sector as I evaluated a lot of grassroot companies, schools and vocational institutes. At end of 2010, Igot out of Aavishkar and decided to start something in the field of education.”
One of the first GlobalLogic employees, Dinesh Singh, decided to join Garg as a co-founder and they started exploring ideas together. Garg says education as a sector is tough but has large gaps that they felt they could fill up. “We wanted to do something that involved education and technology as that comes naturally to us. Over time we also realized that we wanted to do something around employability. We finally came up with a course that instills self beliefand skills in working professionals to be able to provide leadership to the industry at large,” says Garg.
The duo took about six months to formally start Sunstone Business School and officially launched it in November 2010. The first batch was started in July 2011 with 25 students.
An MBA with a difference
Sunstone Business School, a completely online facility, was founded with the idea that an MBA degree needs re-imagination. “To us, it was clear that though business skills are very valuable, the present day MBAs cannot deliver it. There is a growing dissent against MBA holders that they do not really know much, aspirations are too high and may not fit the business environment,” saysGarg. The focus of the course, according to Garg, is a problem-based learning approach instead of the usual lecture and test approach.
“The program is about solving problems and we feel the students will pick up real life skills needed in the corporate sector while doing that. When you think of online courses, you think of video lectures and virtual classrooms. We do very little of that and we use tech more as a collaboration and learning tool but the real hero is the curriculum and the pedagogy,” says Garg.
According to a Deloitte study last year, a key concern cited by higher education institutes is the lack of autonomy with respect to framing course curriculum resulting in a course structure that is often outdated. The curriculum is often not oriented to encourage entrepreneurshipand innovation among students.
Garg says to preserve his autonomy and enable quality, Sunstone is deliberately not affiliated to any university and not accredited by any agency.
The Deloitte study says that as per the data provided by the The National Assessment and Accreditation Council (NAAC), as of June 2010, “not even 25 percent of the total higher educationinstitutions in the country were accredited. Among those that are accredited, only 30 percent of the universities and 45 percent of the colleges were found to be of the quality to be ranked at ‘A’ level.”
Omnia Investments, (a part of the Spice group), invested about Rs 5 crore ($1 million) in April 2011.
“Two things stood out while making the decision to invest in Sunstone. The first was the opportunity to create high quality programs for working professionals. The second was that Rajul and team were the ideal guys to attempt it. A venture like Sunstone needs to create an enabling ecosystem both internally and externally, and Rajul seemed to have the experience and skillsto do it,” says Lokesh Gupta, General Partner, Spice New Investment Fund, also part of the Spice group.
Sunstone Co-Founder Singh echoes Gupta’s view on Garg and says that his leadership style is ‘very action-oriented and execution focused’. “We got good students from our first batch itself. Them paying Rs 2.6 lakh for the course was a testament that they trusted the product,” says Garg.
Sunstone is currently running a batch of 150 students and does two batches a year. “Earlier, we were only enrolling students in Delhi and in Pune, but we have now gone pan-India. We also havea few international students and are expanding gradually,” says Garg.
This article first appeared in Entrepreneur India magazine
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