Hard work is part of it. But winning and being successful is also about outsmarting the competition, says Rohit Kapoor, CEO of analytics and digital solutions company ExlService.
Playing smart is Kapoor's winning formula. It's been that way since his days as a squash player growing up in India. Kapoor, 57, says he was a skinny kid lacking in athletic muscle. But he was also competitive. "I like to win," he told Investor's Business Daily.
He knew he couldn't beat bigger, stronger, faster, and more-skilled squash players. (Despite practicing three hours a day.) Instead, he fashioned a winning game plan that neutralized his opponents' athletic edge. His strategy? Win points without having to engage in long, multi-shot rallies. "I taught myself to serve in a way that I would win the point automatically," Kapoor said.
Apply Life Lessons To Business
Since founding ExlService in 1999, Kapoor has used the work smart formula to fuel growth.
"That's something I still practice," Kapoor said. "We've chosen very carefully the types of businesses that we want to play, where we can create value for our clients, and where we as a smaller company can outcompete some of the much larger firms out there and really gain an advantage."
Kapoor has built ExlService, which operates under the brand EXL, into a company with a market value of $5.6 billion. ExlService helps companies in sectors like health care, insurance, and financial services make sense of data. Since taking over as CEO in May 2008, he's turned the company into a fast-growing data analytics firm and on the IBD Long-Term Leader watchlist. ExlService shares are up more than 550%, vs. just 185% for the S&P 500. Revenue is on pace to hit $1.4 billion in 2022, up 15% a year on average since 2008.
Know Change Is Good
Both change and disruptions can elevate your game, Kapoor says. But only if you adapt to change fast. In fact, digital trends caused by the pandemic quickened ExlService's pace of sales and earnings growth. "It put us in the sweet spot," Kapoor said.
But ExlService's ability to help companies deliver more personalized services to customers in real time was born years earlier. Kapoor quickly spots emerging trends. And he changes course on the fly.
In its early days, ExlService was an email processing company. It helped dot-com companies like 1-800-Flowers.com and Amazon.com provide better service to their customers via email. The math made sense initially. It cost $3 to process emails in the U.S., but just $1 in India where the company was based then. So, ExlService charged $2, earning a nice profit while also saving its clients' money.
Then came the dot-com bust. The price to process emails plunged to pennies. Just like that ExlService's profit went poof.
Adjust When Needed
Kapoor did a quick pivot. Building a business based solely on low cost, he says, was a hard game to win. So, he shifted gears. ExlService morphed into a transaction-processing business. It did back-office type work such as insurance policy administration and mortgage processing.
In 2006, the light bulb went off. Data analytics, Kapoor recalls, was a far better business to be in. At the time, "nobody's heard of data, nobody's heard of analytics," Kapoor said. But doing "higher complexity" work for clients was a way to stand out. That same year Kapoor acquired a data analytics business. Today, 46% of ExlService's revenue come from data analytics, he says.
Fast-forward to 2020 when Covid-19 hit. ExlService was ready when its clients needed help shifting data to the cloud.
"Making sense out of data and applying the right kind of insights becomes hugely important," Kapoor said. "Integrating these things is really what we do."
Serve Customers First
The pandemic caused customers' expectations to soar. Customers want to buy something, get an answer to a question, or access data right now. Not in five minutes, or five hours or five days. Businesses had to up their digital game. And ExlService was there to help its clients — and itself.
"We have a very strong belief that if we can help our customers succeed, we will succeed," Kapoor said.
But to excel, Kapoor says clients face three challenges. They must act with speed, reduce costs, and improve the customer experience. The tough part? "You need to do all three of these things simultaneously," Kapoor said.
That's where ExlService's bet on and expertise in digital operations and data analytics paid off. ExlService helps clients deliver what Kapoor calls "hyper-personalized experiences" to their customers. In essence, helping any business do what a streaming service like Netflix or e-commerce giant like Amazon does.
"That same hyper personal digital experience needs to be carried through to a bank, an 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 for them."
Identify Trends By Talking To Clients
Seeing the next big thing or knowing how to create business offerings that customers want isn't just about data, though. It is all about knowing your client's business. And listening to what clients are telling you, Kapoor says.
"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 clients across the board are facing."
Once you know clients' "pain points," Kapoor says, you can provide services and solutions. The key to growth is finding ways to "alleviate (client) pain points."
Push Through Tough Times
Before starting ExlService, Kapoor was happily working as a banker in India. But after relocating to the U.S., his business unit was shut down after a merger, leaving him jobless.
"I was 34," Kapoor recalled. "We had one child. I had just taken on a mortgage on my house. I was on a work permit. And I was suddenly on the streets."
But losing his job turned out to be an opportunity, Kapoor says, not a dead end. It was when the entrepreneur in him was born.
"The minute I lost my job, I said, look, I need to take more control of my destiny," Kapoor said. "I don't want to ever be in a situation where I'm doing well, and the carpet is pulled underneath my feet."
What did Kapoor do? He opened his own company.
Look Up To Others To Be The Best
Kapoor's mom inspired him to succeed as a kid. Despite coming from a humble background, his mom pushed him to strive for excellence.
"She said, 'you have to go out and be the best,'" Kapoor said.
Kapoor also says he admires and likes the way billionaire investor Warren Buffett goes about his business.
"Buffett does things in 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 will build a sustainable business."
Kapoor added: "These are the kind of people you look up to. And you kind of learn to admire.
And you kind of pick up habits and things from them. And that's been important."
Kapoor's Keys
- Co-founder and CEO of ExlService, a data analytics firm that helps insurance and health care companies optimize their businesses.
- Overcame: A devastating job loss not long after coming to the U.S.
- Lesson: "Success doesn't come easy. It comes after a lot of hard work. Don't expect success to happen overnight. There's no shortcut to success."
