July 21, 2014
Zhihan, please introduce yourself…
I graduated from the National University of Singapore in 2011 with a Bachelor’s in Engineering Science. During university, I spent a year in Stockholm with a medical-tech start-up, thereafter I travelled to India to work with a social enterprise involved with rural IT outsourcing.
I was also active in leading community service projects to rural villages and schools in Laos and Thailand. In 2010, I co-founded BagoSphere in the Philippines. I am also an Ambassador of the Sandbox-Network, a global community of extraordinary young achievers between 20 and 30.
What’s the story behind creating BagoSphere and can you explain what you do?
BagoSphere is a vocational training school helping out-of-school youths to gain quick employment in the BPO. Our 2-months curriculum focus on training of communication skills, life skills, financial literacy skills and most importantly, call center skills that is needed as a call center agent.
We believe in making our program accessible to disadvantaged families, hence we work with MFI partners to finance the tuition fees of the students.
The idea of BagoSphere was conceived by my two co-founders and myself. In 2008, my co-founders Ellwyn Tan and Ivan Lau led volunteer projects in the Philippines, while I led projects in Laos. Travelling extensively gave me an opportunity to explore rural poverty first hand.
I was once leading a volunteering project in Laos. We raised tens of thousands of dollars to construct a community library for hundreds of children to use. We got thousands of books flown in from Singapore to equip the library. It was launched and the whole community was so excited.
As volunteers we felt ecstatic and went home feeling mission accomplished and we all gave ourselves a pat on the back. A few months later, I was backpacking and was passing by so I took the chance to visit the library. To my shock, I found out from the locals that the library was unused.
This community library was placed in a public school. Apparently, there a change in the school management and the new one had a different opinion on how the library should be used. Nevertheless, I was extremely disappointed, and I realize that I had a lot to learn.
While interning for a medical devices technology startup in Stockholm, a friend and I organized a small event inviting social entrepreneurs to share their stories. I was inspired but it wasn’t enough for me. When I returned to Singapore, I grabbed the chance to go to India to experience working in a social enterprise. And that was what I did.
So a few months later, I returned from a study trip in rural India with a social enterprise that trained uneducated Indian youths and employed them to do basic Business Process Outsourcing (BPO) work. At that point, I had enough of being inspired. I wanted to get my hands dirty.
It was at this point in 2010, I met Ivan and Ellwyn who had strong ties with the city government of Bago City, a small city in central Philippines. Bago city is a second-class city in the Philippines, with a population of about 165,000.
When the price of sugar crashed in the 1970s, unemployment numbers shot up and has remained a problem till today. Most high school graduates who have no means to pursue college education find it hard to enter the service industry because of poor communication and job related skills. Manufacturing jobs are few and far between.
In late 2010, we did a market study, talked to a few call centers, discussed our plans with the local government and started working together to solve rural poverty. I joined the team in 2011 shortly after my graduation at the National University of Singapore.
How’s traction working out so far?
BagoSphere’s operations can be broke into 3 section so far – discovery & pilot, seed-funding and validation.
2010 – 2011 – “Discovery & Pilot”
In 2010, the team identified a market opportunity in training rural youths to become call center agents. On the second trip, a training room equipped with 15 donated computers was set up at the city center of Bago City. In 2011, BagoSphere hired 3 local teachers and ran a pilot with 14 rural youths for 4 intensive months.
BagoSphere achieved more than 90% pass rate for the pilot – 13 Students succeeded in finding jobs in call centers. The pilot project was funded by grants from various foundations, and private and public institutions.
2012 – “Seed Funding”
BagoSphere incorporated in Singapore and the Philippines. It also became the recipient of Singapore International Foundation’s Young Social Entrepreneurs Grant Program and an award winner of [email protected]’s Social Enterprise competition in 2012.
Subsequently, the team raised a seed round of capital with Kickstart Ventures and other impact investors from Singapore and Manila. We had assistance from Impact Investment Exchange Asia.
Late in 2011 and back in Bago city, partnerships with call centers and the local government was forged. The first few employees were hired.
2013 – To Date – “Validation”
2013 ended with 100 graduates. To date, BagoSphere has 167 graduates. About 80% are placed within 2 months after graduation and 70% still employed 6 months after graduation.
From 2013 to date, BagoSphere has accomplished the following:
– 5 Call Center Client Partnerships in the Visayas
– Partnerships with BPOs in Manila
– Partnerships with MFIs such as Negros Women for Tomorrow Foundation & KIVA
– Setup a KIVA credit line
– Fully operational business in a rural environment
– Full-time team of 12
– 700+ applicants for 110 training places in 2013
– 70% of students are high school graduates
– 70% of students were unemployed before BagoSphere
– 48% of students were never employed before
What challenges did you face when in launch mode, and how did you overcome them?
1) Hiring was much more difficult than expected: Since we are located in a more rural location, we didn’t have access to many talents which normally aggregate in hubs like Manila or Cebu. Generally, in the rural context, people are less exposed to professional work environments and lack experience in their domain fields.
Hiring good trainers and marketing staff took us a long time. However, it drilled into me some of the nuances of hiring, and I saw through the genesis of BagoSphere’s culture, which is very important to retain talent.
2) Pivoting the Business Model: From the start, we had intended to partner with MFIs to finance the student’’ tuition. We didn’t want to get into the operations of financing. We later realized that the problem is that MFIs only finance their clients. Hence, the model shuts out a huge part of our market.
In the later part of 2013, we decided that we needed to formalize the loans that we provide to our students to attend our training program. We do not have any intention of becoming a micro-finance company but in formalizing the student financing scheme we have now (termed as “study now, pay later”), we are putting in more resources (e.g. Kiva 0% credit line, setting up loan tracking system, implement micro-credit policies, etc) to reduce the risk profile of the financing scheme.
We also separate the credit line used for student loans away from our working capital. When we master this, the combination of our training program and the loan product will allow anyone who is deserving of training to get it.
3) Complexity of operations: As we open more classes, our operations became more complex. Data management became more complex. Collecting data from hundreds of youths became more complex.
Google documents became unwieldy and we had to constantly search for new ways to stay productive and aligned. With operations, it was hard to keep focus on the most important thing. My learning is that delegation is the key here, and there must be A+ people with the right skills to delegate to.
4) Productivity was hampered by poor infrastructure: In rural Bago City, it took us a long time before we had stable power. We suffered from frequent brown-outs and internet disruption during the first half of 2013.
After some red-tape and infinite patience, we have now a much better power supply. Thankfully, Typhoon Haiyan did not cause much damage to our facility and operations.
If you were to start over again, what would you do differently, and why?
Hindsight is always 50-50, so there are many decisions that were made incorrectly and hence many things that could have been done differently. But I would prefer to move forward, with the understanding that challenges and mistakes are part of the journey.
On that note, I will just leave a quote as my last remark to readers. This one that is attributed to zen: “The obstacle is the path.”
What’s next for you and BagoSphere?
Right now we are in the process of fund raising to spearhead our three year development plans. We will be opening 8 classes in Manila & Bacolod City by the end of 2016. To do so we are also looking into hiring more awesome people, developing our curriculum, and trainer/staff development programs.
We are also looking forward to expanding our Curriculum innovation projects through strategic partnerships with BPOs and MFIs in Manila and other parts of the Philippines.