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Hard work is part of it. But winning and succeeding also means outsmarting the competition, says Rohit Kapoor, CEO of a digital analytics and solutions company ExlService (EXLS).
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Playing smart is Kapoor’s winning formula. It’s been that way since he grew up in India as a squash player. Kapoor, 57, says he was a skinny kid with no athletic muscles. But he was also competitive. “I like winning,” he told Investor’s Business Daily.
He knew he couldn’t beat bigger, stronger, faster and more skilled squash players. (Despite training three hours a day.) Instead, he crafted a winning game plan that neutralized his opponents’ athletic advantage. His strategy? Earn points without having to engage in long, multi-shot rallies. “I taught myself to serve in a way that automatically won the point,” Kapoor said.
Applying life lessons to business
Since founding ExlService in 1999, Kapoor has used the formula of smart working to fuel growth.
“It’s something I still practice,” Kapoor said. “We chose very carefully the types of businesses that we want to play, where we can create value for our customers and where we, as a small business, can outcompete some of the much larger businesses and really gain an edge. “
Kapoor has made ExlService, which operates under the EXL brand, a business with a market value of $5.6 billion. ExlService helps companies in industries such as healthcare, insurance and financial services make sense of data. Since taking over as CEO in May 2008, he has transformed the company into a fast-growing data analytics company and is on the IBD Long-Term Leader watch list. ExlService shares are up more than 550%, compared to just 185% for the S&P 500. Revenue is expected to hit $1.4 billion in 2022, up 15% a year on average since 2008.
Knowing that change is good
Change and disruption can elevate your game, says Kapoor. But only if you adapt to rapid change. In fact, digital trends caused by the pandemic have accelerated the pace of sales and profit growth for ExlService. “It put us in the right position,” Kapoor said.
But ExlService’s ability to help businesses deliver more personalized services to customers in real time was born years earlier. Kapoor quickly spots emerging trends. And it changes course on the fly.
In its early days, ExlService was an email processing company. He has helped internet companies such as 1-800-Flowers.com and Amazon.co.uk (AMZN) provide better service to their customers via email. The math made sense in the first place. It cost $3 to process emails in the US, but only $1 in India, where the company was then based. So, ExlService charged $2, making a good profit while saving their customers’ money.
Then came the dot-com bust. The price for processing emails has plunged to pennies. Just like that, ExlService’s profit went poof.
Adjust if necessary
Kapoor made a quick pivot. Building a business based on low cost alone, he says, was a tough game to win. So he changed gears. ExlService has transformed into a transaction processing company. He did back-office type work such as administering insurance policies and processing mortgages.
In 2006, the light bulb went out. Data analysis, Kapoor recalls, was a much better business. Back then, “nobody heard of data, nobody heard of analytics,” Kapoor said. But doing “more complex” work for clients was a way to stand out. That same year, Kapoor acquired a data analytics business. Today, 46% of ExlService’s revenue comes from data analytics, he says.
Fast forward to 2020 when Covid-19 hit. ExlService was ready when its customers needed help transferring data to the cloud.
“Making sense of data and applying the right kind of information becomes extremely important,” Kapoor said. “Integrating these things is really what we do.”
Serve Customers First
The pandemic has caused customer expectations to skyrocket. Customers want to buy something, get a question answered, or access data immediately. Not in five minutes, or five hours, or five days. Businesses had to up their digital game. And ExlService was there to help its customers – and itself.
“We believe that if we can help our customers succeed, we will,” Kapoor said.
But to excel, Kapoor says clients must overcome three challenges. They must act quickly, reduce costs and improve the customer experience. The hard part? “You have to do these three things simultaneously,” Kapoor said.
This is where ExlService’s bet and expertise in digital operations and data analysis have paid off. ExlService helps clients deliver what Kapoor calls “hyper-personalized experiences” to their customers. Essentially helping any business make what a streaming service looks like netflix (NFLX) or an e-commerce giant like Amazon.
“That same hyper-personal digital experience needs to be passed on to a bank, insurance company, retailer, airline or travel management company,” Kapoor said. “What the end consumer wants is not a generic product or service, what they want is something that is tailor-made and specific to them.”
Identify trends by talking to customers
However, seeing the next big thing or knowing how to create business offers that customers want isn’t just about data. It’s about knowing your customer’s business. And listen to what customers tell you, says Kapoor.
“Because we talk to multiple clients, we’re able to see trends,” Kapoor said. “We’re able to see where things are going. And what kinds of issues customers are facing across the board.”
Once you know the “pain points” of customers, Kapoor says, you can deliver services and solutions. The key to growth is finding ways to “relieve (the client’s) pain points.”
Get through the tough times
Before starting ExlService, Kapoor was happily working as a banker in India. But after moving to the United States, his business unit was shut down after a merger, leaving him jobless.
“I was 34,” Kapoor recalls. “We had a child. I had just taken out a mortgage on my house. I had a work permit. And I found myself on the streets.”
But losing his job turned out to be an opportunity, Kapoor says, not a dead end. It was then that the entrepreneur in him was born.
“The minute I lost my job, I said, listen, I need to take more control of my destiny,” Kapoor said. “I never want to be in a situation where I’m fine and the rug is pulled out from under me.”
What did Kapoor do? He opened his own business.
Look to others to be the best
Kapoor’s mother inspired him to achieve success as a child. Although he came from a modest background, his mother pushed him to strive for excellence.
“She said, ‘you gotta go out and be the best,'” Kapoor said.
Kapoor also says he admires and loves the way billionaire investor Warren Buffett runs his business.
“Buffett does things the same way over and over again,” Kapoor said. “He has a very fundamental thinking behind his investment process. And I think if you work hard and apply the right kind of fundamentals, you’ll build a sustainable business.”
Kapoor added: “These are the kind of people you admire. And you kind of learn to admire.
And you kind of pick up habits and things from them. And that was important.”
Kapoor’s Keys
- Co-founder and CEO of ExlService, a data analytics company that helps insurance and healthcare companies optimize their businesses.
- Overcome: A devastating job loss shortly after arriving in the United States
- Lesson: “Success doesn’t come easily. It comes after a lot of hard work. Don’t expect success to happen overnight. There is no shortcut to success.”
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