Tuesday, July 7, 2009

Business of conquering minds

Business Times - 07 Jul 2009

SME INC

After selling 22 pre-school franchises, MindChamps is now looking at M&A to produce qualified teachers, reports CHEN HUIFEN

THE broader economy may be in the doldrums, but that has not stopped the pre-school sector from flourishing. Just ask David Chiem, founder, chairman and group CEO of education services provider MindChamps Holdings. His company sold 22 franchises for its pre-school - even before it had a school to show.

At a price of $65,000 - not including set-up costs like rental and teachers' salaries that each franchisee has to fork out - the feat is not to be sneezed at. 'Even though we didn't have a model, we had an incredible curriculum,' says Mr Chiem. 'And with the branding we already have, I think people trusted us.'

Mr Chiem is no stranger to overcoming long odds. Listening to his story, you cannot help but marvel at his life experiences, which could be the plot for an inspirational drama.

At the age of nine, he fled Vietnam with his family when the country was being overtaken by the communists. Through sheer luck, the boat they were in evaded a pirate attack because of a passing Singapore container ship, whose staff later gave the refugees so much chicken rice they had leftovers when they landed in Malaysia.

'This is why Singapore always has a special place in my heart,' says Mr Chiem.

The family ended up in Australia. And even though Mr Chiem could not speak a word of English at first, he topped his class in six months. Later, in senior high school, he graduated top of his cohort in English, art and maths.

The turning point in his life came at the age of 13, when his sister heard an audition call over the radio. 'It said, 'Looking for 13- or 14-year-old Asian boy, must be able to swim',' says Mr Chiem. 'Back then, I couldn't swim. But when my sister heard it on the radio, she said, 'Why not you?'

'She said it as a joke but when I went to bed that night, that line was in my head - 'Why not me?' I just kept on asking that question. I thought if it isn't, that's OK. I'll just give it my best shot. If I don't give it my best shot, I won't know.'

So he learned to swim - and became the first Asian to get a leading part in an Australian TV series, called Butterfly Island. But that was only the beginning of his story. The experience taught him the power of having a positive and open mind.

'I just thought that to live a life without realising the full potential is one of the saddest things to do,' he says. 'For me, the question of why not me is a powerful question. What I realised was, the quality of the questions you ask yourself at a non-conscious level play a critical role. Just that one question led me to believe and pursue my dreams.'

Mr Chiem was so enthusiastic about the TV role that he called the casting director regularly to ask whether a decision had been taken.

'I'd make sure I had a 20-cent coin and as soon as the school bell rang, I'd run to the nearest public phone and call to ask if they had made their decision,' says Mr Chiem. 'They'd say, 'No, not yet, call back on Friday'. And on Friday, I'd ring them up on the dot and they'd say, 'Call back on Monday'.

'So every time they said to call, I called. Frank, the director said that by the time he heard that story, the decision was made - 'You and this other boy are just as good as each other, but if your mind is that strong on wanting to make it happen, it's yours'.'

This notion was to become one of the fundamental elements for MindChamps, a training institute that thrives on teaching students what it calls the 'champion mindset'. Incorporating neuroscience research done by academic and author Allan Snyder of the University of Sydney, MindChamps espouses 'how to learn' rather than 'what to learn'.

The company roped in experienced educators and theatre practitioners to come up with programmes that engage students and help them focus. As Mr Chiem points out, the cinema world has always engaged the non-conscious mind to communicate. One of MindChamps' notions is to leverage on that art to deliver its programmes. 'So content is not the issue,' explains Mr Chiem, who studied acting at the prestigious Theatre Nepean in New South Wales. 'We have to upgrade the software of how to engage students' minds to teach the content, so the content becomes a part of them, not drilled by rote so much that they hate it.

'If kids hate learning, we have a problem, because in the 21st century world you've got to keep learning, un-learning and re-learning. Because what you just learned, in two years' time, may be obsolete.'

Although MindChamps was conceptualised in Australia in 1998, the business was started in Singapore in 2002, as Mr Chiem saw Singapore as a more appropriate launchpad to target the Asian market, which places a high emphasis on education. Since then, its specialist school has expanded to Hong Kong, where a wholly owned subsidiary employs 11 staff. In Malaysia, it has a partnership with an international school in Kuala Lumpur, offering specialist programmes.

The decision to enter the pre-school market was driven by a desire to expand the applications of research findings.

'In our research, we realised that for a lot of gaps in primary and secondary years, the roots can be found in pre school,' says Mr Chiem. 'For example, when a kid is at pre-school, they love to learn, but when they go to primary school sometimes they could end up having a negative relationship with learning. If we can build the love of learning and nurture the positive relationship to learning, children will take that love for learning into primary school, and half the battle is won.'

Although MindChamps has sold 22 franchises for its pre-school, revenue from the sales cannot be booked until a franchisee has signed the tenant lease for a target site. By the end of this year, Mr Chiem expects to have 12 pre-schools, including the first outlet that opened at HDB Hub last year and two that were recently opened by franchisees on the East Coast and at Tampines.

So confident is he about the pre-school sector that Mr Chiem expects that business unit to be listed in about five years. But growth in the pre-school market depends on the availability of qualified teachers. So MindChamps plans to take a stake in a teaching academy to offer diploma and graduate diploma programmes in pre-school and early childhood teaching.

'We could do that ourselves but it might take a year to get all the licences,' says Mr Chiem. 'So we're negotiating an M&A now. If the deal goes through, the academy will come under our brand.'

Although the pre-school market remains buoyant, MindChamp's specialist school has been affected by the economic downturn, with student numbers falling some 20 per cent this year.

Fortunately, the company has been preparing for the launch of two new business units. Early this year, it introduced school workshops for teachers and students, aimed at developing life skills such as leadership and team building, creativity and time management. Another new arm, MindSpace, offers after-school care services, including homework and life coaching.

With so many new businesses, MindChamps will be focusing on the Singapore market this year. 'I think next year is the year when we will take the franchise to the region,' he says, adding that the target markets will be Malaysia, Thailand, Indonesia, Vietnam and China.

But he hesitates to forecast if this year will be a profitable one, in lieu of investments being made. 'As a group, I would say in 2010 it will be a total turnaround because of new units like Hong Kong, the pre-school and new franchisees opening,' he says. 'That will be our very strong year. Now, we have no gearing at all.'

Asked about a recent investment exit by Hong Leong Group, Mr Chiem says the parting is due to the two organisations having very different perspectives on education.

'Like in a marriage, when the vision is not aligned, it's best that both parties move forward, and we are very happy that we came to an amicable decision,' he says.

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