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iYogi Cover story - Inc India Mar 2011
iYogi Cover story - Inc India Mar 2011
iYogi Cover story - Inc India Mar 2011
iYogi Cover story - Inc India Mar 2011
iYogi Cover story - Inc India Mar 2011
iYogi Cover story - Inc India Mar 2011
iYogi Cover story - Inc India Mar 2011
iYogi Cover story - Inc India Mar 2011
iYogi Cover story - Inc India Mar 2011
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iYogi Cover story - Inc India Mar 2011

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Inc India Mar 2011 - Cover story on iYogi

Inc India Mar 2011 - Cover story on iYogi

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  • Great read, great story about how two great minds have taken off their ideas all the way from India to west. I am sure iYogi will soon make billions. What a coincidence! Some of my colleagues were talking about their experience and market reputation of iYogi. While I was hearing them bragging about an India based tech support company I was wondering is competent enough to overcome their communication problems and accessibility to impress US-based customers. Now, I learnt that yes, iYogi really does its job.
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  • I completely rely on iYogi. The accuracy and accessibility of iYogi’s service is unparalleled and pushing beyond the limit of customer satisfaction. Plus, iYogi technician’s knowledge and professionalism deliver what is expected from a technician. They have proven great capacity in giving quick resolution to most complex issues. With iYogi’s talented team of professionals, iYogi will reach new horizon of technical support.
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  • I know iYogi right from its inception... I’m one of their initial customers and have seen iYogi management putting hard work and dedication to improve their services and taking iYogi to the heights it has achieved now. They have brought in lots of new plan and strategies to keep their customers happy… iYogi sets an example for thousands of budding entrepreneur businesses throughout the world.
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  • Don't aim for success if you want it; just do what you love and believe in, and it will come naturally, so true! And it is clearly evident how the founders gave in their best in establishing the company. Also, in the coming years, the company will flourish. You are truly inspiring. This story is a true inspiration.
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  • Very inspiring story... describing the making of iyogi... I am overwhelmed by the pain taken by its founders in establishing the company and taking to the heights where it is now. The future plans too sound very impressive. I wish iyogi all the best in its ventures. Hats off to you guys for taking the initiative in helping others get rid of their tech woes and make it your business.
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  1. THE WAY I WORK Rajyasree Sen Cooking up a storm of bytes PAGE 64 How RAMES GROVE H built t R h CMS groe PAGE 5 upAugment 4the realityof your Get clearbrand about your company’sPAGE 57 future PAGE 40 UNITED BY AMBITION UDAY CHALLU and VISHAL DHAR have built iYogi into a Rs-250 crore tech support business in four years. Now, they’re chasing billion-dollar dreams. PAGE 32March 2011 | 150 | Volume 02 | Issue 02A 9.9 Media Publication
  2. 32 | INC. | MARCH 2011
  3. ZOO MIONG AHEAD NTHE GLOBAL HIGHWAY It’s not enough that Uday Challu and Vishal Dharhave built a consumer services brand in the West, sitting right here in India. They’re gearing up for$1 billion in revenue in the not-too-distant future. BY POOJA KOTHARI | PHOTOGRAPHS BY SUBHOJIT PAUL MARCH 2011 | INC. | 33
  4. ZOOMING AHEAD ON THE GLOBAL HIGHWAY VEN MY MOTHER doesn’t understand what we do,” says Uday Challu, CEO and co-founder, iYogi. In fact, she isn’t the only one. Parents of most of the 20-somethings employed by iYogi find it hard to comprehend what the company does. Is the ‘i’ for investment, or India? Or, for the internet? And, what to make of Yogi? That’s not a common word, even in India. Put them together, and what do you get? Well, a global business worth 250 crore in four years—one that provides technology services and support to end consumers in the US, UK, Canada and Australia for prices varying between $40 and $169. Here’s how the service works. If a consumer faces a problem, they can seek iYogi’s assis- tance either on phone, or online. Depending on the nature of the problem, iYogi charges them for a one-time intervention, or for an annual contract to help every time a problem arises. While a single person remains in contact with the consumer for that complaint, at the back end, multiple specialists can be brought in to solve the problem. It doesn’t matter which brand, device or technology has a problem. It doesn’t even matter which geography the consumer is calling from. As long as there is a tech prob- lem—a computer that has crashed, or an iPad that refuses to sync with the iPhone, or a printer that just won’t follow a command—these Yogis will do their best to solve it; all to earn some ‘good karma’. There are a few thousand of them—6,000 to be precise—a majority sitting in six floors of a tony commercial building in Gurgaon. This army of engineers, call centre agents, business developers, researchers and search optimisers starts work every afternoon. It is bound by a single mission—to resolve a problem that’s sent its way in the least possible time and in the most satisfactory manner. It’s a simple business, really. Someone has a technology problem. iYogi solves it—and, gets paid. “It was a hugely underserviced market. We just spotted an opportunity and went after it,” says 48-year-old Challu.34 | INC. | MARCH 2011
  5. THE MARKET“Technology support is a $30-billion marketin the US alone,” says Alok Mittal of CanaanPartners, an initial investor in iYogi. There’s little doubt that it’s a hugemarket. According to a Fast Companyarticle, “Americans spent a whopping $4billion on tech support last year. Thatnumber should grow to at least $6.4 bil-lion by 2013, and remote help is poised todrive much of that expansion”. With the growing popularity of devicesin the hands of consumers, be it smartphones, tablets, laptops and so on, thismarket will only get bigger in future. Forinstance, even within mobile phones, thereare now multiple operating systems sup-porting different phones. Just syncing gad-gets with different OS is stressful forend-users, especially those who haven’tgrown up with these devices. These includepeople above 50 years of age, who form amajority of iYogi’s customer base. UDAY CHALLU | Co-founder and CEO No wonder Challu and his team areconfident of victory in the battle to set up atech support company out of India. “There Always an Entrepreneurare 74 million broadband homes in NorthAmerica. If I get 25 per cent of those, I willhave 18 million households. That’s $3 bil- B orn to an officer in the Indian Air Force, Uday Challu led a life typical of the armed services. He attended 11 schools in 12 years and lived in different cities across the country. He wasn’t to know then, but it was a good rehearsallion in revenue. And then, there’s UK, Aus- for the professional life he was to lead. In his 27 years of working life, Challutralia, Middle East, India, China and so has dabbled in many things. “I’ve held a job twice in my life,” he recounts. The first one was just after he finished his graduation in economics from Uni-on,” counts Challu, excitedly. versity of Delhi, when he took up a job with CAL Systems, a start-up in Okhla in Given that iYogi’s journey began only in 1984. He joined them at a princely salary of 650 per month, and worked there2007, when the company was incorporated for the next six years. “Even Wipro wasn’t into computers then,” recalls Challu.and the first call taken, its scale of achieve- In the middle, he left CAL along with a colleague to start a computer main-ment is commendable. The firm has built a tenance business in 1986, but when that didn’t do well, he shut it down and went back to his former employer within a few months. His first entrepreneur-subscription base of around 400,000 cus- ial stint was rather short but it gave Challu a first-hand experience of the limi-tomers in the US, and solved more than 2 tations of trying to build a scalable business with people.million problems—all on phone, or online. In 1992, he joined a friend of his, who was working in the apparel manufac- The firm’s winning combination—an turing industry. Challu and his friend decided to set up a retail chain of retailability to communicate with the consumer stores along the lines of Benetton. This was a business he knew nothing about. And, yet, Challu landed up creating a chain of six stores in Delhi, called Yankeeand a platform to deliver support—has Clipper. With two factories in Okhla and Ludhiana, and a workforce of 1,400 peo-helped iYogi create a successful business on ple, Challu established a turnover of more than 2 crore a year in 1995, when hefirst try. “We’re the first consumer services sold the business. “I realised that India has no core competence in this industry,brand out of India,” says Challu. except that we grow cotton. Machines come from abroad. Manufacturing is done It has held its own among competitors, better in a place like China, where people have an industrial bent of mind; the real designs and clothing sense come from the West,” recalls he.who are based locally. There’s Geek Squad, After that Challu worked for another start-up, did a three-month stint withthe customer service operation run by Best a technology firm in the US, and started a boutique consulting firm mentoringBuy, a leading consumer electronics technology start-ups. That’s where he met Dhar. For the past many years, he’sretailer in the US. It runs in-store services, had no life beyond work. It’s only when he gets absolutely physically drainedwhere consumers can walk in with their that he goes home to Gurgaon to his wife, his 22-year-old daughter, and dog. Two years short of his 50th birthday, Challu hopes to free up some time fromhardware to get the problem sorted, sends iYogi to drive his bikes, a Ducati and a Hayabusa.technicians to people’s homes, or takes the MARCH 2011 | INC. | 35
  6. ZOOMING AHEAD ON THE GLOBAL HIGHWAY equipment to its depot for repairs. Then, there is a clutch of online support services, such as PlumChoice.com, which provide tech support to the customers of other companies. And, there are call centres run by manufacturers, such as service centres of Dell or Apple, which a consumer can turn to for support. Despite sitting miles away, iYogi has done a good job of understanding its cus- tomers. “Our first call resolution rates are among the highest in the industry,” claims Challu. There’s no independent verification of these numbers. However, iYogi claims to have “90 per cent resolution rate” for the past 24 months and an even higher cus- tomer satisfaction rate. It’s this ability to solve problems that appealed to Canaan Partners many years ago, when Challu approached the venture capital firm for funds. “Their first call res- olution was in mid-80s, while the rest of the industry, including Microsoft and Dell ran rates of 50-60 per cent. These guys were much better even at the pilot stage and that too, in a multi-brand envi- ronment,” adds Mittal. nity. Friday followed, which he started with two partners and built into a considerable business. “At one point in time, we were providing content to 44 different websites,” recalls he. However, VISHAL DHAR | Co-founder and President, Marketing despite two acquisitions and the best efforts of Dhar and Co, the company had to be shut down Bullish on the Future within three years. Luckily for him, that company introduced Dhar to his future business partner, and now, co-founder at iYogi, Challu. W hen Vishal Dhar met Uday Challu in 2001 to seek investment for his entrepreneurial venture, he was hardly to know that just a few years later, they’ll become Together, they first set up IQ Resource, a business targeted at business-to-business media industry. It was while working on this business that the idea of iYogi first struck Challu. partners in businesses. Dhar was then running Friday Cor- Since its inception, Dhar has looked after marketing at poration, a content aggregation business and his first stint iYogi. “I’m always amazed at how tech can change people’s as an entrepreneur. lives. My mother has a Kindle, and a laptop; and my dad has an Prior to that, Dhar had set up the Indian arm of UK-based email ID. The fact that Google has become the window to the Text 100, a public relations firm focused on technology busi- world shows a change in consumer behaviour,” adds Dhar. nesses. “I got my first taste of entrepreneurship with Text 100 It almost seems that his entire life prior to iYogi was spent because even though I was an employee, we scaled it up from a in preparing for this business. Whether it was the ability to team of two employees to more than 50 employees across four market technology brands that got honed at Text 100, or sim- offices,” says the alumnus of The Lawrence School, Sanawar. ply the idea that processes can drive efficiency that came Born in Kashmir, Dhar’s childhood was spent in the idyllic from IQ Resource, Dhar has put a lot of his past learning into environment of pre-violence hit Valley. Post his schooling, Dhar his current responsibilities. attended Pace University in the US, where he stayed till 1995. Based out of New York, where he lives with his wife and two After returning to India, Dhar spent a year with Mudra’s public children, Dhar remains focused on the “opportunity-of-a-life- relations arm, before he chanced upon the Text 100 opportu- time” that makes every day at iYogi an exciting one.36 | INC. | MARCH 2011
  7. Convinced of the potential, Mittal’s firm the concept of “delivering a invested $3.2 million in iYogi, along with high-quality service out of SVB India Capital Partners, almost four India”. That was the time when years ago. Since then, iYogi has gone on to Dell had taken its back-end raise $57 million in several tranches from operations out of India and reputed investors, such as Draper Fisher back. Even Apple had experi- Jurvetson and SAP Ventures. Most recently, mented and opted out of India. it raised $30 million from Sequoia Capital On top of that was the sheer and existing investors in December 2010. lack of experience that Challu This money has clearly been put to good and Dhar had in this field. Nei- use. According to press reports, iYogi’s ther had worked in the out- turnover has increased from under 13 sourcing industry, and had no crore in 2007-08 to 82 crore in 2009-10. It idea what it would take to exe- aims to close the fourth year of opera- cute a model along these lines. ALOK MITTAL | Canaan Partners tion—2010-11—with revenues of 250 The duo wasn’t in a hurry, crore, three times that of last year. Challu claims to have added 5,000 peo- though. “We ran a pilot for more than a year. We figured out how to Guru Speak ple across cities, such as Bengaluru, Pune deliver this service, built the plat- and Chandigarh, in the past year alone. “We hope to add another 6,000 in the next form, and created the technology and people processes required to deliver that service, I t’s said that things get quite lonely at the top. Rarely can a CEO find a confidant, or a mentor 12 months,” he adds. then we hired people, and trained them. within the organisation. He has to usually look outside. We asked Only once we had all the pieces in the right Alok Mittal, who has known Uday THE BEGINNING place did we raise capital,” recalls Challu. Challu since 2007, to give some It was around 2005, when Challu and his With an investment of $750,000 from advice to the captain of the iYogi business partner, and co-founder at iYogi, personal savings, Dhar and Challu set out enterprise. Here’s what Mittal had Vishal Dhar, put a hypothesis to test. They to “build the company from ground up”. to say. were then running a boutique consulting Neither had ever worked in the outsourc- One thing to continue doing: That’s firm, IQ Resource. The first wave of out- ing industry. Challu had previously set up a an easy one. Uday must maintain sourcing had proven that back-office oper- few businesses, including a retail chain for his hunger for the business. He ations could be easily delivered from India. clothes in Delhi; while Dhar came from a has found some very creative solu- And, as people became more accus- marketing background. tions to problems in the past. He’s good at anticipating challenges and tomed to internet and dependent on tech- “For either of us to put our skills and displaying creativity to solve those. nology, more and more devices found experience to use, we needed a product. themselves in people’s hands. Yet, there And, we didn’t have one,” remembers One thing to start doing: When a wasn’t anyone to support those multiple Challu. So, they did what turned out to be company grows as fast as iYogi is, devices. “I knew the market existed. The the best thing in hindsight—they hired it hides many weaknesses. I would advise Uday to keep an eye out for original equipment manufacturer doesn’t some people from outsourcing firms those. There is a risk of compla- own the ecosystem, just the component he around Delhi, including IBM Daksh, Con- cency, arrogance and inefficiencies makes. Therefore, someone else would vergys, and so on. building up in the system. Uday has have to take the ownership of the entire “We basically focused on what the busi- to find and weed those out. system,” says Challu. ness will look like in 10 years—and then we Acting on his instinct, he travelled the got onto doing things that will take it there world to check on the need for solving in 10 years,” says Challu. technology problems. “We spent one year Even as Shruti Dwivedi, the first hire Yogi became iYogi,” regales Challu with researching this space. We met all sorts of who now runs a large part of operations, tales from the early days. people; spent time with people that ran went about figuring out how the support Their lack of experience didn’t stop tech support centres for large IT vendors will be delivered, Challu and Dhar took it them from aiming high, though. “We like Microsoft and Dell to figure out what upon themselves to build a brand. “We wanted to get into this business only if it their customers were telling them. We wanted to build a brand out of India. So, was massively scalable. To me, that meant a experienced the flaws in the IT support we needed a word that was universally firm worth a couple of billion dollars inCOURTESY SUBJECT ecosystem,” adds Dhar. recognised for its Indian origin. We didn’t revenue, has millions of customers, and There was large-scale scepticism even get Yoga, so we opted for the closest alter- can still keep evolving along with technol- among friends and acquaintances about native—Yogi. Together, India, internet and ogy,” says Challu. MARCH 2011 | INC. | 37
  8. ZOOMING AHEAD ON THE GLOBAL HIGHWAYOUR STRENGTHThere are a number ofthings that have worked iniYogi’s favour so far. Themost important, accordingto Challu, is the team hemanaged to put together. When his team firstcame on board, each personcame with different aspira-tions. “But once they camehere, their individual moti-vations very quickly My Office,changed into a larger plat-form, a motivation that My Sanctuarydrives all of us together,”reasons Challu. There might be somemerit in that argument. Of the 35 peopleiYogi started with, 27 are still around. “We F or more than four years now, Uday Challu’s life has revolved around his work. iYogi occupies much of his day—and his mind space, so much so that it takes him “more than an hour” after reaching home to wind down enough tohaven’t lost any people at a senior level, be able to go to sleep.except the ones we asked to go,” says Dhar. It’s not surprising then that his office is more than a place of work for him. It’s It helps that together, the group of some packed with personal belongings—whether it’s the gold fish that his daughterof the earliest and senior employees own gifted him, or the huge painting of Ganesha that was a gift from his sister and nowmore stock on the company than Dhar and covers an entire wall of his 12 ft * 18 ft corner room. There are the corks of champagne bottles that were opened at the officeChallu combined. Yet, that’s hardly the party last month, sitting pretty in a transparent glass vase. And, then, there’smain motivator, feels Challu. the divine presence of the powers that be that Challu calls upon frequently— “We found a common purpose in what from the typical mandir hanging on the wall behind his desk to the nishan sahib,we wanted to achieve for the company and a long metal pole that is sacred to the Sikhs. In another corner are framed pho-how that translates into shareholder value, tographs of ships from World War I that he bought for a friend. And, now intends to find the time to send to him.economic value and, therefore, value for all There’s no missing the influence of Mahatma Gandhi on Challu. The enve-of us. That’s a rare situation,” he says. lopes, in which he packed the stock options awarded to employees, contains the It also helped that from the very begin- Mahatma’s sketch along with his famous line: “Find purpose, means will follow”.ning, Challu ran iYogi with all systems andprocesses on board. Whether it was thedecision to put 15 per cent of the company Challu has the personality and creativ- “Within a year, Uday had shown that met-stock into an Employee Stock Option Plan ity of a “classic entrepreneur”, but he has rics,” says Mittal. The end result of focusing(ESOP), or performance appraisal systems, surprised everyone—may be even him- on specific deliverables ensured the companyor a balanced scorecard, the company was self—with his ability to manage scale. “At managed its growth well within its means.ready for scale even before it received its every stage, he has operated ahead of thefirst customer call. curve in bringing the right people on IN SERVICE WE BELIEVE Canaan’s Mittal adds another perspec- board,” comments Mittal. From early on, Challu thought of the busi-tive to the iYogi growth story. “One of the When growth demanded an expan- ness as a technology business, rather than anthings that Uday has managed to do is sion of numbers, he opted for captive outsourcing business—and, built it accord-build a transparent senior management BPOs to solve the problem instead of try- ingly. There is a 20-member research andteam that can challenge each other. Cultur- ing to hire every resource internally. Sim- development team today whose only job isally, that has allowed them to grow as a ilarly, iYogi showed an amazing ability to to stay ahead of the consumer’s problems.company,” says he. work with the resources it had. At each “No one knew Steve Jobs was going to “Uday doesn’t believe that he has all the stage, it raised money with a clear goal in make an iPad. But the moment we knew heanswers, or the best ones. Everyone knows mind—and met that. was on to something like that, we got on to COURTESY COMPANY (5)what the issues are, and what’s going on. If After the first round, the money was the task of figuring out what possible issuessomeone comes back with a solution and it spent to explore internet as a sales channel, its adoption would have amongst our sub-passes muster, it’ll get done,” adds Mittal. and get the “unit economics” in place. scribers,” says Dhar.38 | INC. | MARCH 2011
  9. ZOOMING AHEAD ON THE GLOBAL HIGHWAY Adds Challu: “We have to remain grown to account for between 30 and 35 the best from them. We’ll continue to growahead of technology, so whenever con- per cent of the company’s revenues. for a long time; we’ll need specialised skills.sumers buy something, So developing those skills is importantwe’re there with them to IKE CHALLU, the business he runs is from our perspective.”solve their problems. thinking far ahead of itself. iYogi’s open- Challu’s problems don’t end with get-That’s our core capability. ing its first service centre in Philippines ting the right talent on board, though. Get-We have to be ready when this year. “Within six months, we should ting people to deliver on intent isthat call comes.” have a centre in Latin America,” adds something he’s already struggling with. Another aspect that is Challu, who’s keen on the Middle East as “It’s only in India that you need to put aunique to iYogi is its well to cater to Arabic-speaking users. supervision layer and a quality layer on topdependence on online Plans to launch the subscription ser- of people. It drives our costs up—and itmarketing. Says Pradeep vice in India are already drawn. “By the drives me crazy. Why can’t people simplyChopra, co-founder, Digi- end of the year, we will be a household do what they are paid to do? I’ve had to puttal Vidya, an online mar- name in India,” promises Challu. The a hierarchy in place—someone who willketing consulting company is also planning to launch field make sure that another person, who knowscompany: “They have used services by engaging 14,000 technicians he has to do 10 things in an eight-hoursearch engine marketing in North shift, actually does those,” says Challu.really well.” America in the So far, he resisted having a HR practice iYogi’s online market- next quarter to in the company. After all, how hard can iting has 200 people, up cater to the be for college graduates to manage them-from four just a couple of home and busi- selves in an environment where all systemsyears ago. “We’re one of ness segment. are automated? Well, as Challu’s discover-the biggest spenders on Being a ing now, quite, it seems. “Some of the largerGoogle AdWords from India,” says K.R. savvy businessman, Challu knows that companies, like Genpact and IBM, haveSreejith, vice president, iYogi, who’s been finding the talent to feed his growing the same people problems, despite theirwith the firm for the past three years. appetite might be difficult. So, he’s taken it superior HR practices. So, I am trying to This team also creates content that upon himself to do something about that. manage this issue in completely differenthelps customers solve some of the prob- “We’re launching an online certification ways. I am going to create a methodologylems on their own. “It’s not fair to ask programme for technology support and where if you want to work for say, foursomeone to pay an annual subscription fee services; and we aim to train 250,000 peo- hours a day, you come and do just that.”for something as small as changing the ple in the next three years,” he says. The company already has a strongwall paper, or un-installing a program,” Delivered online, the course will train learning and development function. “Weadds Sreejith. Such issues are solved people in tech support jobs, and make constantly engage with the employeesthrough self-help videos that are put up them available for employment in other through My iYogi, our internal networkingonline for convenience. industries, such as remote infrastructure site for the employees. From the day they The company has also been quick to support and technology support, as well. join, people know their career paths,realise other channels of service. iYogi bun- Another skill that they’ve honed in- including the options of cross-functionaldled its services with partners, such as house, and now intend to market, is that of positions. And, we have minimum fourMcAfee, Dell, Avast and Wal-Mart, to gain internet marketing, in which iYogi will weeks of training per employee; evena toe-hold into American households. offer another certification programme. higher for technicians,” says DeborahToday, its sales come directly from global “There is a huge shortage of people trained Steele, manager, HR, who hires nearly 500online marketing campaigns, as well as in internet marketing. But we’ve cracked it, people a month for iYogi. So far, the com-from its partnerships with retailers, OEMs, so now we’ll teach others. It will be deliv- pany has managed to keep its attrition ratesanti-virus companies and independent ered on video straight to the user’s laptop, manageable due to these initiatives.software vendors. and we will put people in mock situations, As iYogi puts its ambitious plans into “When we offer our services free of cost, and bring elements of virtual plan into the action, it is bound to run into such prob-the customer gets to experience our ser- training,” adds he. lems, some will be more manageable thanvice, and we get a chance to convert the Again, he displays the restlessness of a others. But, as long as digital homescustomer into an annual iYogi subscriber,” typical entrepreneur. Even before his bil- become a reality, and Android phones fightsays Ravi Neb, vice president, business ser- lion-dollar dream is reality, Challu’s look- with those powered by Windows 7, andvices, iYogi. In the two years since the first ing at other “building blocks”. He justifies it iPad gives birth to a new generation of tab-partner programme was launched, these with: “There’s a selfish reason. If I train lets, Challu and Dhar will only get busier in“non-direct marketing channels” have 250,000 and iYogi needs 25,000, I can hire the days that follow. MARCH 2011 | INC. | 39

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