Rediff.com« Back to articlePrint this article

OfficeTiger: An amazing success story

Last updated on: September 14, 2006 16:38 IST

OfficeTiger, one of the first to enter the business process outsourcing space in India, is now the undisputed king especially after R R Donnelley & Sons acquired it for a whopping $250 million in an all-cash deal.

OfficeTiger, however, will continue its operations as an independent unit and its co-founders, Joseph 'Joe' Sigelman and Randolph 'Randy' Altschuler, will continue as its co-presidents.

While Sigelman operates from India, Altschuler sits in New York.

The story of the two young men chucking their high-paying jobs (Randy was in private equity at The Blackstone Group and Joe with Goldman Sachs International in London in the Investment Banking Division) to enter the outsourcing arena, from India, has become a legend now.

This is the tale of the journey that Joseph Sigelman undertook from New York to Princeton University to Harvard Business School to Chennai.

The real life story of Joseph Sigelman is no different from the story of any young man from a south Indian conservative middle class family. But he is not a south Indian, not even an Indian; he hails from the United States of America.

But Joe likes to describe his family as "a conservative middle class, south Indian family" where kids are urged to study, work hard and do well in academics. Joe's father is a doctor, mother a pharmacist, and his uncles are police officers.

"When lot of kids were playing after school, I sat at home and did my homework. My parents made sure that I went to school regularly and did my homework without fail. As my parents wanted me to study in the best school in the city, I had to commute three hours daily, but I utilised the time in commuting by doing homework on buses and trains!" he says.

At the Princeton University

When young, Joe had no idea what he wanted to be when he grew up. But he was sure that he would study only in the best university in the United States. So he was off to the prestigious Princeton University for higher studies.

"Princeton was a great experience because in American universities, you can pick so many diverse subjects." He opted for courses in English (Shakespeare), in engineering, and in history. And what he enjoyed the most was reading Shakespeare's Hamlet!

Despite enjoying history and Shakespeare the most, Joe became a banker. "I went for some interviews when in the university and got excited about what bankers were doing. But I had no idea what banking was."

Joe as a banker

Joe admits that as a banker, he was terrible. "From day one, I realised I was terrible in banking. They gave me balance sheets and I didn't know what a balance sheet was! But they couldn't fire me because they felt very bad to fire a very hard working guy!"

"The only thing I remember from early days of banking was that if you sleep on the floor at 2 or 3 in the morning, you can keep your legs on the desk! The bank felt so bad about having me there that they gave me a great recommendation to study at the Harvard Business School! That was their way of getting rid of me as fast as possible before I did much damage," Joe said with his typical wry humour.

Harvard Business School

One thing that Joe still cannot forget about his days at Harvard is the classes he had to take. "Every day, the professor would pick one student and ask him to speak, and I was so shy that I dreaded it. We had to speak extempore on case studies."

The summer job he got when he was at Harvard was at Goldman Sachs in London in investment banking. "I had decided never to go back to banking, and there I was once again, in banking!"

To his surprise, he found that he had a great time doing the summer job at Goldman Sachs. "The atmosphere was great and the work culture amazing, and I enjoyed doing investment banking."

Entrepreneur

However, it was at Princeton that Joe met Randolph Altschuler -- Randy -- and their friendship continued at Harvard too. "Till I went to Harvard, I was not exposed to entrepreneurship. I always wanted to be a bit of an iconoclast. I wanted to do things that are unconventional."

Randy then joined The Blackstone Group in New York and Joe was with Goldman Sachs International in London in the Investment Banking Division. So at night, both had long telephonic conversations about starting something of their own. They spoke at length on various ideas.

Then, "one dark and stormy night when thunder clouds were clapping, both of us had the same experience and the same idea."

What was that experience and the idea?

Both of them were working on their presentations for the next morning at the in-house typing pool. At night, the typing pool would be filled with actors and poets who were moonlighting to make ends meet.

"It was three in the morning, and there was this guy who had an audition the next day and was tired and ready to go home because he had a play earlier in the morning. He gave me back my work, but he had accidentally put his script inside my presentation. I was banging my head in exasperation. I called my buddy Randy to share my misery with him. And, he also had exactly the same experience in New York! It was a strange coincidence," Joe recounted.

That made them think. "There has to be a better way of doing things."

As Joe had been to India before as a child, the image of India came to his mind immediately, and he asked Randy, "What if we can do this work in India?"

"Why not?" was Randy's reply.

Both knew the concept called business process outsourcing (BPO) would work. "We hadn't an iota of doubt about it. Probably, stupid confidence, but we were confident."

This was way back in 1999 when nobody was talking about outsourcing. Except GE, nobody was doing any outsourcing work from India; GE also had only just started.

Both Joe and Randy resigned from their well paying jobs, packed their suitcases and travelled not to Bangalore but to Chennai in India. The question Joe's shocked mother asked was, "Joe, you went to all these good schools and universities and got good pay. Now, you want to go to India and be unemployed?'

Why India?

Joe had been to India (at age 12) and knew India, knew India enough to take risks. "I didn't even think about other countries. It was intuition. It is like falling in love all of a sudden one day. I knew it would work from India. And it worked. That is because the best cross section of talented people is in India."

Why Chennai? "We looked at the various cities in India. And what tilted it in favour of Chennai was my love for masala dosa! I remembered the taste of the masala dosa I tasted when I was 12!" Joe chuckled.

On a serious note, Joe added, coming from the US, he didn't want to be in a bigger city like Mumbai or Delhi. "Bangalore was like the Silicon Valley and we preferred a quieter place. And it has been a great, great experience in Chennai."

On reaching Chennai, they checked in at Hotel Connemara. The hotel receptionist asked them, "How long will you stay here?"

That was in 1999. By 2006, Joe has not checked out yet. He still lives in the same room at the same hotel.

OfficeTiger

Both Joe and Randy pooled whatever money they had and started OfficeTiger in Chennai on the September 1, 1999. The name OfficeTiger was a unanimous decision; it was Princeton's symbol and it was at Princeton that both of them met first. The friendship still continues.

They took up space at Spencer Plaza in Chennai, and according to Joe, the initial days were very difficult and challenging.

"The first ten people I got were very well educated and hard working. But when we appointed people, we didn't ask them whether they could type, and they couldn't. So, the first six months were spent on teaching typing. When we appointed those who could type, they didn't know English! That was the second mistake we made," he recalls.

Initial hiccups over, the first job they got was desk top publishing for a global bank, though it was very tough to convince the client in the US that quality work would be done from India. "Now, it is not so," Joe emphasises.

In the first three years, the revenue doubled ever year, the number of employees touched a thousand, but Joe and Randy were not satisfied. "We were a small company. We had only 15 clients."

Donnelly buys OfficeTiger

When R R Donnelly and Sons, a giant US firm which had a turnover of $8 billion in 2005 with branches all over the world, offered to buy OfficeTiger for $250 million, both Joe and Randy couldn't refuse.

"We thought about the offer for three months. What tilted it in favour of the deal was the fact that Donnelly has over 600 offices around the world. Now, we are part of a company that has resources of $8 billion with 50,000 employees. It will be helpful to OfficeTiger, we thought. We are now one of the largest BPO firms in the world," Joe says.

In April 2006, OfficeTiger decided to become a Donnelly company. "It was a tough decision. On the one hand, it was our baby, and on the other, Donnelly was offering so much more for the employees, which we could not have. Looking back, I feel it was one of the wisest decisions we made."

Unlike many other entrepreneurs who sell their companies for big amounts to start another one, both Joe and Randy chose to stay back with OfficeTiger.

"In my case, my dream is to make OfficeTiger a huge company. Randy also feels the same. Now we have more opportunities and more clients. How many 34-year-olds have the opportunity to run businesses with 10,000 people?"

OfficeTiger with 10,050 employees has 4,000 in India. They primarily focus on law, banking and publishing. With 29 delivery centres and 42 client sites across nine countries, OfficeTiger is the second largest BPO firm in India.

In Kerala

When others dread going to Kerala, OfficeTiger has started a branch in Trivandrum with 250 people. It may go up to 1,000 soon, says Joe. "Every city has its advantages and disadvantages. I am not worried about labour problems which Kerala suffers from. If you treat people well, then, you have nothing to worry about. In Trivandrum, people are very educated, and they travel a lot. Many come back with the experience of working elsewhere."

The future of BPOs

The future of BPOs in India depends on imparting better education to the young. According to Joe, other than the best universities, there is a rapid fall in the quality of education.

"If we take the IT, the ITES and the BPO industries, you are talking about 100 million people. We have 40 people applying for every position in the company, but 39 of them are not qualitatively good. That's because they are not properly educated. Education has not kept pace with the growth of the economy. So, the government should funnel resources on a massive scale into education."

"I don't think education is getting enough attention in India. Unless you get a supply of good resources, it will move to other countries to make sure there is a balance between supply and demand. Already, we have operations in different countries." Joe speaks from his experience.

Ambition

The $250 million Joe and Randy got from Donnelly was pumped back into OfficeTiger for its expansion because earning money is not the ultimate ambition in their lives.

"I come from a very middle class family. I just don't think about money. Money never has driven me to do anything. Money doesn't matter to me at all."

"Money matters when parents haven't done their job. My parents have instilled in me the need to be disciplined, hard working and confident. I basically feel that if you keep your head down and work, things will work for you. I care only about the success of OfficeTiger. In life, we should do things that will make us feel happy," says Joe.

Joe who sleeps only 4-5 hours a day, works seven days a week and has not taken a vacation in the last six years. He is proud of the fact that he is a workaholic! "I travel a lot all around the world on work. That is vacation for me."

Material things don't matter to Joe. He doesn't own a house or a car. He travels by auto rickshaws in Chennai.

The only ambition he has is to make OfficeTiger the most professional business service provider in the world. "There is a long, long way to go."

(Above) Joseph Sigelman, co-president, OfficeTiger.

Photograph: Sreeram Selvaraj

 

Shobha Warrier