Create Lab is an educational institution that helps children to become “expressive in using technology”. Established in July 2015, it is the brainchild of two investment bankers, Thilan Wickramasinghe and Dhruv Vohra, who had the vision of better preparing children for using technology in the modern age.
Although most mainstream schools teach children about technology, the curriculum within these schools is too ‘goal orientated’, with insufficient emphasis on creativity and problem solving. With technology changing so quickly, it is more important to teach children in a way that allows them to adapt to these changes, by allowing them to identify issues and develop solutions through technology, whether through coding, design, or robotics.
As ex-investment bankers, Thilan and Dhruv took a very analytical approach to starting their business. They assessed the size of the opportunity, the appropriate product offering, and how best to scale the business; hence market research was a key element of their initial and quite detailed business plan. Fairly simple analysis allowed them to identify an ‘addressable market’, aided by data widely available in Singapore on child populations, household compositions, and income. While birth rates in Singapore are declining, parents are investing more in their children through extra-curricular activities and further learning. There were no doubts about the latent demand for their services, which they assessed to come from children of parents in the top 20th income percentile in Singapore, representing about one-fifth of the primary school population.
They evaluated the competition through a series of ‘mystery shops’ of competitor establishments. Having young children themselves was a good ‘cover’ for these shops, from which they could assess the nature of the competition and its limitations. They observed that competitors were generally owners/managers who were doing their own teaching from one premises and had little ability to scale their business to the addressable market.
In only one year of operation, Create Lab have put over 300 children through their curricula and recruited 20 teachers to their organisation. They found the market to be even larger than expected, because a lot of demand ended up coming from parents who were sending their children to local schools (70%) which were less advanced in creative technology, and so parents were looking for different styles of tuition.
Create Lab are smart in managing the two biggest cost elements that affect most business: staff and facilities. For staff, most of the teachers are employed part time, but this arrangement actually helps the company to attract teachers from a much larger pool of candidates. In Singapore today, many people look to supplement their income through second jobs or side businesses. Tuition is a profession that can easily be undertaken part time, and it also provides much more job satisfaction and status compared to more casual part-time jobs.
Create Lab attracts highly qualified and experienced professionals as teachers from both academia and industry. Teachers undergo 30 hours of online training, followed by 15 hours of in-person training, at which point they can become assistant teachers. After gaining experience they become lead teachers―the pay differentials between assistant and lead teachers provide a real incentive for staff to progress and stay with the company. BDRC Asia has found through its SME Series that finding and retaining talent is one of the most challenging aspects of building businesses in Singapore, but through this model Create Lab has overcome these challenges.
They were also smart in controlling facilities costs―they retain a small ‘head office’ and then rent facilities on an as-needed basis in various locations around Singapore that can be closer to the parents and the teachers. They often target companies that have under-utilised facilities (e.g. conference and meeting rooms in offices that are not used at weekends) and can therefore be hired at low cost during these times.
But all companies have some challenges. For Create Lab, the main challenge was selling their concept to parents. Sometimes parents in Singapore are too obsessed with grades and results, and Create Lab does not have formal examinations since they are teaching creativity, something that can be hard to grade, or that they would not want to grade as this can stifle creativity.
Hence selling their concept needs to be done on a one-to-one basis, and so the cost of client acquisition can be high. To aid business development, they undertake market research on a continuous basis―they conduct online surveys with parents to identify the professions that are attracted to their style of teaching, and from this they can seek to target others (e.g. through networking events). Even simple data such as the location of the parents can help to identify where to hold courses. People in the East of Singapore have been particularly attracted to Create Lab, even though their office is in the West―are people in the East more creative?
Create Lab also undertakes focus groups with children to check on the ‘user experience’ of their courses, and refine the courses according to what they observe among their ‘respondents’.
Create Lab is currently looking at overseas expansion and in Q1 2017 they will open their first foreign business in Sri Lanka―a market that is surprisingly advanced in areas such as protecting intellectual property. Sri Lanka will also act as a stepping stone to the much larger opportunity in India―this is where scalability will really matter!