Maestro's ongoing journey
The Edge - February 2, 2009
By Karamjit Singh

Photograph courtesy of The Edge

Azreen Latiff and Aris Samad-Yahaya are two entrepreneurs who do not believe the market or the government owes them a living. Their six- year entrepreneurial journey has also dispelled the notion that bumiputera entrepreneurs have it easier in this country.

For the duo, who were initially focused on their supply-chain software, their journey into the education market via their school management system happened by accident, as it so often does with entrepreneurs.

Out of helping their alma mater was born QuickSchools (www.QuickSchools.com), an online school management system that runs on the ASP (application service provider) model, which has helped them gain traction in the US market.

"We made a mistake in the first two years of focusing on the Malaysian market," says Azreen. "Not only is the private school market too small - with about 130 schools - but it is also tough to convince them of the value of our software."

Hence, their brave foray into the US market, which has around 33,000 private schools. Their company Maestro Solutions has two full- time empLoyees there, helping them make inroads into the country. Azreen was there for a month recently and is about to leave for another month.

Aris and he are working on the final stage of securing venture capital, which will go some way towards the RMS.7 million they need to improve their software, the business strategy of which they modelled after Google's. Indeed they even allow you to use a free version for three months, complete with 24- hour client support. Talk about having confidence in your product.

The two men are impressive, driven, competent and honest. "We've worked tremendously hard over these years to build a reputation as an honest, competent and technologically advanced company," says Aris.

They hope this will be the year they make their breakthrough.

In the following Q&A, Aris and Azreen share their journey so far and the lessons learnt.

What is the latest with Maestro Solutions?

As we indicated in our last interview with The Edge (Oct 1, 2007), we have fully launched QuickSchools.com which is an online school management system. In the US, we recently concluded our first public launch, where we made a strong impression at the Conference of Independent and Religious Schools in Albany, New York, on Nov 17 and 18. The interest level was very high and over the last few weeks, we have brought on board more than eight schools in the US and two schools in the UK.

Why were you not successful with your initial supply-chain solution and what lessons have you learnt as entrepreneurs from that experience?

I think we are experiencing very encouraging success with the supply-chain business. We’ve registered growth year on year and we foresee the business growing further. The only issue that limits growth is the market size of the various industries we are in. We are in very select industries which have only a handful of companies. Thus, to grow on the back of expenence was hard as we could not leverage know-how immediately to the next customer. Of course, there were many lessons which were transferable but there was very little scope for us to be dominant in any single vertical, as each vertical was too small.

When we won Venture 2002, this is what the judging panel had to say of our idea: "Not just a business idea. Marks a real breakthrough involving use of a new algorithm that is fascinating." (The Edge, Jan 20, 2003) Unfortunately, or in hindsight very fortunately, we learnt that there is a big gap between having a good idea and the potential to make money and actually making money.

Despite all the venture capital interest at the time, all we ended up with was RM25,000 in prize money and that was it. We decided that we had to take control of our destiny and not get caught up in the venture capital hype of the time. Of the RM25,000 prize money, we rewarded ourselves with RM6,000 for the effort put in to win Venture 2002, and poured the balance RM19,000 into Maestro Solutions. In five years, we have learnt how to grow a million-dollar business with zero debt.

We have been profitable every year since year two. We have designed and created optimalOne, which is probably one of the world's best Web2.0 platforms, and we have real customers paying us real money to do real work.

The real lesson is that to be successful in business, there are some fundamentals that must be mastered. These fundamentals do not exist in the business per se, but in the business of the business. We are today, as entrepreneurs, so different in mindset and thinking about success as compared to where we were in 2002. It has been a painful but rewarding growth experience.

While you want to target the US market, among others, many Malaysian entrepreneurs have lost money in trying to develop a market in that country. Why do you think you can be successful?

Not only have many Malaysian entrepreneurs failed in the US, even US-based entrepreneurs fail in the US and that is an absolute fact. Anyway, the reality is that just as many Malaysian entrepreneurs fail in Malaysia. The real question is, what separates success from failure? We have spent a good three years studying this and let me share our thoughts on what we have learnt:

• The first "success" metric we imposed on ourselves was that we had to reinvent ourselves from being technopreneurs to business people. We had to get away from the seduction of technology to the reality of business that is underpinned by cash flow, growth and profitability. We think we have succeeded agalnst this metric based on Maestro’s five-year track record.
• The second "success" metric is that to be big in the Internet era, we have to find a black swan* and this black swan has to meet three criteria: (i) Make a massively complex problem simple. If we look at Google, they have made the massively complex problem of searching for information on the Internet so simple for the end user. Just type your search in the box and presto, high-quality results come out: (ii) Sell it for a ridiculously low price. Again using Google, they have made it ridiculously low priced - they gave it away free: (iii) Give it "infinite" scalability. Again sticking with Google, they have infinite scalability - anyone who connects to the Internet gets to use Google. We really believe QuickSchools.com meets all of the above criteria.
• The third "success" metric is that to be truly successful, this black swan must succeed in the US and for this, we turned to the heart of all success - "unique experience." And our positioning is simplicity. We ensure that at every touch point, prospects and customers experience simplicity - "Wow, this is so easy."

We have taken QuickSchools.com to the US and in every presentation we have made, we got the same response - "Wow, this is so easy." We have had customers who ditched the market-leading system in the world for ours. Even schools with no school management system exposure signed up.

Right now, all indications are good. At our big conference in Albany, New York, we had the opportunity to present to over 500 school administrators and the response was exactly the same.

How much mnoney are you going to need to further develop the school scheduling solutions and how do you plan to raise it?

We need RM5.7 million over the next two years to bring the business to an exciting level. We target QuickSchools.com to have 572 schools by the end of year three. The reality is that the window of opportunity is closing fast. Currently, there is no clear market leader in the online school management space, but in less than 24 months, we anticipate that there will be clear candidates for the market leader position. The only way for us now is to actually raise the capital needed to give this business a real chance at succeeding. The opportunity must he given the fair chance it deserves.

Of the RM5.7 million, we expect to invest a further RM2.5 million to advance the scheduling algorithm. We have applied to Multimedia Development Corp for the MGS grant and we hope to receive a favourable response from them soon.

Is your solution going to be entirely open source-based or a mixture? Why choose this option?

We use the best components available at any point in time that works to our advantage. Sometimes, it's open source, sometimes it's paid. We've chosen this option mainly because it's the best plan for us. Software is really a function of skill, experience and in some ways, luck!

The reality is that the open source enterprise components are so advanced now and can really give the big boys a run for their money. Open source components, like JBoss and Postgres, are highly regarded in the software world and can hold their own.

How would vou assess the environment today for entrepreneurs in Malavsia than when you started out?

There is always opportunity to be exploited by the entrepreneur. It’s a combination of talent, alot of hard work and of course, luck (again). We've always believed that the world doesn't owe us a living and we've been blessed with the breaks that came our way but believe you me, there were many, many events which went against us throughout the six years. We’ve worked tremendously hard over these years to build a reputation as an honest, competent and technologically advanced company. The Maestro treatment and covenant we give to our customers is that at the end of the day, they should know that we’ll solve it!

What is the single biggest thing the government should do that you believe will help emerging entrepreneurs the most?

We feel the government has done so much for tech companies under the MSC initiative, We've even heard that the government can create customisable incentives to help companies grow further. We don't know what more the government can do. At the end of the day, businesses will have to learn how to compete and operate sustainablv. It's something that we're learning as well. On the other hand, the local market has been burnt numerous times by failed IT implementation by local companies. As a result, local companies often opt to choose foreign brands as a safe option. As a software company, we really can't blame the customers for choosing foreign brands under the circumstances, It will necessarily take time to repair such an impression and we hope to continue to change the perception one company at a time.

* The Black Swan theory (in Nassim Nicholas Taleb's version) refers to a large impact, hard-to-predict and rare event beyond the realm of normal expectations (http://en. wikipedia.org/wiki/Black_swan_theory)