07/14/2007 08:11 am ET Updated May 25, 2011

Release 0.9: Outsourcing Man Bites Dog

Last weekend in Bangalore I met with K. Ganesh and Srini of TutorVista.

Everyone has heard of big banks and large tech companies outsourcing work to the masses in India, but TutorVista serves a different kind of clientele. Founder K. Ganesh (K. is a place-holder for his father's name Krishnan for bureaucratic inquiries; he has no first name) has already created three successful companies in India. IT&T, which he founded in 1990, is now a publicly listed systems integrator in India. In 1990, with funding from Softbank and News Corp., he founded a call center company called CustomerAsset; it was sold to India's largest bank (ICICI) and recently IPO'ed as FirstSource Solutions Limited. And in 2003 he became non-exec chairman and active advisor to Marketics, a marketing analytics company recently sold to NYSE-listed WNS for $65 million.

That left him in the nice position of not having to work for a living, but since he lives to work, he started a fourth company 18 months ago with Ravi and CTO Srini (no last names for them either).

TutorVista is an education outsourcer; it serves many of America's neediest - poor kids who need help in school, but can't afford a private tutor at the typical US rate of $40 to $60 an hour. (They're still rich by Indian standards, of course; they can afford a PC and a high-bandwidth connection, although some of them connect to TutorVista through computers at school or community centers.)

It all got started when CustomerAccess was featured on the New York Times front page with a quote: "I am calling from Bangalore but dare not say so." Says Ganesh, "That prompted a cartoon appeared where a parent was telling their kid - 'No, you may not outsource your home work to India.' I looked at the cartoon and thought 'Why not?'"

Person to person

Note that this is not online learning, where a student interacts with course materials, but online tutoring, where a single student interacts with a real-live human being, communicating via a shared screen and a voice (VOIP) channel. The student gets genuine personal attention from a teacher who may have an accent, but who actively encourages that single child and usually monitors his progress from session to session. Because this is not a call center where the workers are either chasing unpaid bills, fielding support queries or upselling customers, the tutors don't attempt to hide their origins, but they do take care to speak slowly and clearly. And because it's not a call center, the teachers aren't trying to rush the kids through a transaction; they're giving that rarest commodity of all: personal attention.

Using trained teachers who communicate with the students online from their homes, TutorVista can afford to offer online personal tutoring for $100 a month with health-club style pricing: Join for a month and use all you like. Usage ranges from a few hours to 30; one desperate outlier student was online for 60. (Because the tutoring is truly personal, the tutor will notice if two or more kids try to use a single account.)

Most of TutorVista's teachers are experienced teachers who are now retired; they are often tired of working 10 hours a day five days a week in India's school system, but they still love teaching. TutorVista allows them to work from home, typically four hours a day. Of course, the hours are a bit unusual - mostly between 2 am (to match the US East Coast's after-school hours) to 8 am (the end of the West Coast's after-school) - but they can control their own hours and earn a lot more than they would as regular teachers with classes of 40 or more children. So far retention has been 98 percent, says Ganesh.

The students are typically motivated, if mystified by their schoolwork, and generally can learn if someone takes the time to lead them through it. TutorVista advises the student/parents to try out a few tutors until there's a match; from then on, the child can ask for a preferred tutor and they work out a schedule. For a new student, there's generally a twelve-hour advance booking time; the student specifies the specific area of study - second-grade math, for example, or twelfth-grade English, so that the tutor can prepare a lesson plan or collect appropriate materials.

So far, TutorVista is working closely with four rural US school districts on a pro-bono basis; there, the company has the full set of curricular materials. For other school districts, the students and parents work out what material needs to be covered, just as with a "regular" tutor.

So far, the company has over 3000 subscribers and 520 who love their jobs. Those are still small numbers, but the model makes sense. What it needs is publicity - which it got in the form of coverage on NBC's Today show last month.

Ganesh loves this business, it's clear, and he knows how to run it well. The team have spent much of their lives perfecting the arts of scheduling and motivate remote, part-time workers, developing tools to foster online relationships and working out all the kinks of remote services, but now they get to god's work instead of commercial tasks. They do want to make money, and they have funding from Sequoia Ventures, but they are also working on some nonprofit spinoffs. (This does not include the work with the four rural districts, which is part of the for-profit business and accounted for as a marketing expense.)

Tutor Vision

Of course, you might ask what all this does for *Indian* children. Ganesh wants to spread some of the bounty at home, too, but it's a little more challenging, since most of India's hundreds of millions of children don't have broadband in their village, let alone at home. But there are ways to reach them, including a joint venture with Microsoft to produce a low-cost software-loaded PC optimized for TutorVista's services that can be used anywhere there is a broadband connection.

Of course, one might ask why TutorVista can't just operate in India's schools...but that's too subversive a question to ask just yet. Stay tuned!