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Services being sought

Services are a dominant component in many developed...
BRUCE BILLSON: Jonathan Sanghvi, you were actually the inspiration for Kinetic Education. Tell me a bit about the story.
JONATHAN SANGHVI: Yeah, that’s right. It was actually when I was about six, seven years old. I was struggling with my own learning. I had a bit of a hearing difficulty when I was younger, and had an operation to fix that. But because I was struggling, and my dad being a computer programmer, and my mum being a teacher, a maths teacher, they thought they’ll just make some little games for me to help improve my own learning. So some maths games, and some English games, and I responded really well to that. It wasn’t until a few years later, when that drove the inspiration to do something with education, computers because obviously, 30 years ago there wasn’t anything like that.
So that pioneered for what we do today.
BRUCE BILLSON: So at what point was that the realisation there’s a niche market opportunity here?
JONATHAN SANGHVI: Obviously, I wasn’t the only child struggling who needed help. They recognised, OK, tutoring is a big thing, as far as a lot of people spend money on tutoring and private tutoring. But not everyone can afford private tutoring. And sometimes it’s not even the best thing for kids. Young kids can’t necessarily concentrate for an hour and sit down with a tutor for an hour. And it doesn’t always work that way. So they thought, well, computers are interactive, they’re fun, they’re engaging. So that’s a good way to connect with children to help them learn. That’s where the inspiration came for this.
BRUCE BILLSON: So how do you find the customers?
JONATHAN SANGHVI: I think the beauty of our business today is it’s a negative from the point of view is there is so much competition, but it’s great from a point of view of the opportunity to reach out to customers is online. So we find a lot of our customers online. We work with schools, as well. And we have an offline presence, as well. But a lot of it’s online nowadays, which creates so many opportunities, whether it’s here in Australia or overseas.
BRUCE BILLSON: So targeted marketing through social media and the like. What’s your most effective marketing channel?
JONATHAN SANGHVI: We do a bit of everything nowadays. Facebook, Google AdWords, and that sort of thing. And obviously, having a social media presence, and reviews, and testimonials, and that sort of thing. By combining everything, we can really get our name out there much easier than we used to.
BRUCE BILLSON: So really, to be a leader in the niche that you’re in is all about being very specific to the needs of your clients.
JONATHAN SANGHVI: It’s really personalised. That’s exactly what it is. It’s a personalised learning program for each child. And then just recognising that just an online program on it’s own, kids won’t necessarily just do it. But if we give them guidance and say this is what you need to do each week. And give reports to parents, and have interaction with parents. And give them strategies to help. If I can help their children learn, then we can get a great result. The online strategies which we’re doing in the Australia work overseas. So we don’t necessarily need a large team to generate the business or the clients.
But what we can do is do a lot of that work from here, internally from here. And that’s what our focus is on. And so we are having a lot of success in Canada at the moment, and expect that to go bigger. We’ve started in the US and UK at the moment, as well. And we’ve also got India.
BRUCE BILLSON: So how did you choose those markets? For someone thinking about being a specialist in a very particular area in perhaps a niche market they may have identified, to then see it widen in terms of where they can activate their business, what made you choose between those?
JONATHAN SANGHVI: Canada was mainly chosen because of the similarities between here and Australia, so Canada and Australia. So we just recognised that a lot of the educational systems and a lot of similar areas in cultures and the way attitudes are towards education.
BRUCE BILLSON: So a bit of a fit for your business with that market that you were looking to go into, a familiar fit?
JONATHAN SANGHVI: Yeah. I think it felt very familiar to what we do in Australia. And we had a good person we trusted, who was actually a Canadian living in Australia. And he felt it was a really great fit. And we could replicate what we’re doing here. From there, Canada– US is obviously very closely aligned. And US being such a huge market, and they have a desperate need for education. And previously, before online, it’s very much about the person on the ground, which makes it much more challenging. But now it’s more we can do a lot of the advertising from here online. And we can do a lot of support here.
So it’s a much easier step to get into the US.
BRUCE BILLSON: Would you have done anything differently over this journey, looking back?
JONATHAN SANGHVI: There have been certain times and opportunities where we could have probably got investment, which would have rapidly improved cash flow, and that sort of thing. And the opportunity to expand and invest in what we do.
BRUCE BILLSON: So you’d bootstrap the build out from retained earnings rather than bringing in new investors.
JONATHAN SANGHVI: That’s how we’ve done it. But there have been times reflecting, and aware of it moving forward, that when we’re going well it’s the time to look for investment not when you’re doing a reinvent. Because everyone wants to say– when you’re doing well, everyone wants to give you money. Whereas, when you are reinventing what you’re doing, everyone’s a bit more cautious about things. So that’s one thing I would have done differently with our families as far as finding that there’s a few opportune times where we could have probably got some good investment. And we should’ve taken advantage of that to really expand and grow the business.
BRUCE BILLSON: Three tips you’d give for an entrepreneur looking to really dominate a niche market or go into new markets. What are the big three tips you’d give them?
JONATHAN SANGHVI: Have good people around you that you trust and can work with. Even when you’re recruiting staff, don’t just find someone to fill the role. Find a person would can do the role really, really well. Second tip would be to have a really strong plan as far as what you’re strategy and marketing plan is. So for instance, a new venture or a new business, even if they’ve got a great idea, make sure that they’ve got that plan and expect it to cost double what they plan. And expect it to take longer as well. So plan for that. If you can’t make that work on paper, then think about what you’re doing. And make sure you spend time with family.
BRUCE BILLSON: Get that balance right. Jonathan, thank you for your time today and for sharing some of your insights with our audience.
JONATHAN SANGHVI: No worries. Thank you.
Services are a dominant component in many developed domestic economies but are increasingly becoming a feature of new market opportunities for SMEs applying their know-how internationally.
As we discussed in Step 1.10, trade is made up of goods and services. Education is a service that has a growing impact on export trade figures in many countries.
In Australia, for instance, international education is the ‘largest service export and the nation’s fourth-largest export overall – after iron ore, coal and natural gas’ (Deloitte Access Economics 2016).
This is primarily in tertiary education and the vocational training space, but as you heard in the video, there is also a market for education services in primary and secondary education, including tutoring that supports students’ formal schooling.
With the increasing sophistication of educational technologies and the reduction in the cost of high-speed internet access, education will only continue to grow as a market opportunity.
As with all new market opportunities, it is best to do your homework and plan carefully if this is an area you feel equipped to enter.

Your task

Identify if your SME or one you’re familiar with is a ‘services business’. Describe in the comments the particular expertise and capacity provided as a service and into which new markets you believe it could be supplied.
In your comments, discuss any regulatory or standards requirements that you believe may need to be met before the service can be supplied into the new markets you’ve identified.
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SMEs and New Markets: Trade, the Chinese Powerhouse and Online Opportunities

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