Hi everyone, welcome to another episode of The SME Show where I bring on proven entrepreneurs around Asia and reverse-engineer the strategies and tactics to succeed. Now in this interview, I have interviewed Patrick Cheo from AKLTG. So today, almost everyone in Singapore has heard of Adam Khoo and the training company which is Adam Khoo Learning Technologies Group for short is AKLTG.
Now over the last 14 years, they grew their company to over 100 staff, annual revenues crossing for more than 10 million and have expanded to 7 different countries around Asia. But the big question is how did they all get started? How would the early beginning, their mistakes and what were their plans that worked? That’s what I aim to uncover in this interview.
Marcus: Hi everyone this is Marcus here again from The SME Show and today I've got Patrick
Patrick: Hi Marcus
Marcus: AKLTG for those of you who do not hear of it, it’s a seminar business with multiple divisions now. Today you are in about 7 different countries and you've transformed over a million lives and today you have also operated with more than 100 staff. But let’s go back to the very beginning, the story of how you met Adam and how AKLTG started
Patrick: Alright. I first met Adam when we were in NUS studying Business Administration course. Back then, there’s 5 of us who has decided to start a business in entertainment, mobile disco company to be exact. After 1 to 2 years old of operation, we decided to shut it down because we are graduating.
Marcus: So, that operated while you were still in school?
Patrick: Back in our school days, we did not really have an easy life because we were doing parties, mobile disco till 3am and by 8am we are in school for lessons. So it was not an easy task in managing both studies and running the business at the very beginning.
But I think that laid down the foundations on how to go about doing business because we have to prepare a proposal and meet clients when we were students.
Marcus: I guess that kind of process is invaluable.
Patrick: Of course. Every knowledge was added on to the experience in running a business.
Marcus: So, that was the mobile business and then you guys have to graduate. How was the training business (AKLTG) started?
Patrick: What happen was, after I graduated, I worked in a Singapore Press Holding company as a management trainee. And after 2 years, Adam asked if we should start a business together. Back then I was only 25 years old and I told my wife to be that I want to quit my comfortable job, give up all my bonuses and start this business with Adam.
So after I graduated, I worked in Singapore Holding as a management trainee and after 2 years
People around me would probably think I am crazy, but, I am grateful to have the support from my wife and parents. At the age of 25 I got married and handed in my resignation letter.
I then started this business together with Adam and another partner. Adam was the silent partner and my other partner Zac and myself were the active partners. The reason why I got married before starting a business was because one of my philosophies I believe is, starting a family first. I became a father at the age of 27 while I was still running my business and working very hard.
Marcus: So that was the event business?
Patrick: That was actually an event business and we upgraded from mobile disco business to and event business. Because we did not want to own any equipment back because it’s tough to carry around.
So, we got the deals in the event business, we subcontract and got different subcontractors to come into the show. After 2 years, we realised in business one of the things to do in strategic planning is to predict or forecast your revenue. But we couldn’t do that because as a service provider you’re unable to predict when is your next dollar coming in.
It’s kind of hard to secure the retainer contract because the big boss will be the one who’s able to do that and we were just a small company in the market. Adam was actually doing training for people when he graduated and freelance. We thought it would be best if we start a company doing training and that was how we started. The event business wrote out about SGD$8,000 cheque. With the SGD$8,000, we started the business and after 2 months we returned back to the money to the event business and the training business started to roll from its own cash flow.
Marcus: It’s very interesting, AKLTG was like a subsidiary of the events business and you wrote a cheque to start AKLTG. What was then $8,000 used for?
Patrick: I think it was used to pay salary and other stuffs. Back then Adam and I did not take a salary for the first year. So every cent that we earned was put back into the company.
Marcus: And back then when you started AKLTG, how many courses were there?
Patrick: When we first started, we had this Pattern of Excellence (POE) which is a personal development program for adults and concurrently we were also marketing for a kid’s program called ‘SuperKids’.
Marcus: And that was how Adam is known among the kids.
Patrick: While all these things were happening, the fact is we had three business units operating without people. So the idea for any business is to watch your cash flow. I have the seminar business which is the B2C business, the school business which is the B2G kind of business and we were doing corporate training which is a B2B business.
So when we first started, we had three businesses all operating at the same time. The B2C business generates the cash to support the B2B and B2G business. And when this gets paid, we support the other side. The beginning part was all about cash flow management for the first few years of the business.
Marcus: That’s very interesting. So there’s like 3 BUs started at once and at the same time. A normal layman may look at that and think I have 3 BUs to run at the same time, 3 different ways to market, 3 different sales team going around trying to hunt for deals out there. Must be overwhelming for you back then.
Patrick: Back then, the irony was I was not the one who is running around to meet clients in our school. We actually hired people to do so. My task back then was cash flow management and strategy, understanding where we stand in the market and what we need to do. It was all about the strategy on what we need to do.
For an example, many years back then there was no instalment credit card scheme for a seminar business. We were running a course at SGD$1,800 for the kids program. I asked myself with a SGD$1,800 program how do I make it affordable for my customers. There was no way how we can do this back then.
I was walking around the mall and saw they were offering instalments for televisions and fridges. I asked myself why can’t we apply the same theory to the seminar courses. That was when I went to the banks. And they said its different because in any event if the customer couldn’t pay the balance, they can take back the fridge which is the asset, but for a seminar business, if one wants to refund it would be very challenging. So I made a deal with the bank to say that I would underwrite in the event that if the customer wants to refund the money, I will pay back the money that they require.
Marcus: Wow! That’s a big risk that you took. Was that a calculated risk because a lot of time people could also sign up and get the installment plan and not pay.
Patrick: You see the Idea was there were many parties who win doing this strategic breakthrough. The first person which is the customer who is now able to do a 6,12 or months instalment scheme. After thousand over dollar program converted to a hundred over dollar per month which is very affordable. The second thing is, we as the provider get to take the money immediately within the next few days. The bank, of course, get the customer to spend on the card. So, it’s a win-win situation for everyone.
Marcus: So because of that you manage to scale. Going back to the part of 3 BUs and I think that’s highly fascinating. How do you structure the company so that it’s something scalable. How many people do you have back then?
Patrick: 2 people. Technically the BU’s were my way of recognising the revenue and the strategy for each BU. Back then, we wear different hats and put
When I first structure the business, it was based on the functional approach with BU’s but the BU’s were just a mean of recognising the revenue meaning I have technically a marketing department and operation department.
As we grow, we realize that the functional approach could not support us and we need to put people directly into the business units. The structure will change accordingly. In the different business units they will have a relevant people inside there. As we grow and scale, the respective business units are big enough growing the business.
As we mature and became more experienced, our structure changes according to our needs. Today our structure is completely different from when we first started. We have different teams, each team is made up from 2-3 people and all the way to 8-9 people. We call them the commando team with a task of mission to achieve. They have their own operational and marketing needs and they have to solve all the issues within the team themselves And every team is given an incentives if they hit their targets and they all have to work together collectively as a team.
Marcus: So each commando team will have a guy for sales, operations, marketing and etc?
Patrick: Technically, yes. We grouped the teams based on the business that they are in. So for example, in the seminar or event business, there’s about 5 or 7 teams part of their business. In the school training business, I will have about 3 teams operating on different type of programs. I believe this structure will enable us to grow exponentially in the future.
Marcus: I do believe so because it’s seems very flexible and at the same time they operate based on teams. So each team has their own P&L
Patrick: Yes, every team has got their own P&L.
Marcus: So it’s a very bank way of looking at it and I think Standard Chartered has very similar way where every department as a group must be positive. Let’s go back to the time when you first started. I think a lot of times when an SME owner had their first tried to hire people, they would want to hire operational person and so on. But in our earlier conversation, you mentioned that you hired people who are smarter than you and knows things that you don’t. Tell me more about the first few people that you hired for the company.
Because now it’s easier to hire because AKLTG now is a brand itself and people love what the brand stands for but I think the most difficult time would be in the beginning when you started the business. Tell more about the time when you have to hire the first few competent people with good integrity. Share with me more about those days.
Patrick: I think when we first started, I don’t think we need the best engineers or the best of everyone. I have strong believe that if they feel comfortable in the company, you can bring the best out of them. So, back then my job as the CEO was to bring out everybody to the highest potential. We want people to grow within us. The idea is that whoever that you have with you, you have to make the best out of them.
Marcus: Can you share with us back then when you hired someone and you make the best out of that person?
Patrick: Over the last 10 years of managing people, I have learned one thing, the ways to convert their weakness and focus on the strength to bring them up to the highest level. There are many ways to do this.
If you feel this person has got the strength and capability, send them for more training to enhance their capability, put them in a position where they will use that strength for the business. Because if you look at every person, they have got their strength and weakness. It’s the same thing as for parenting. If you focus on the right strength in the right place, they will move much faster and better.
Marcus: Talk to me also about who were the first few people you hired and for what purpose because I think ALKTG, the company that you have
Patrick: I think I have been quite lucky because I never choose people. I don’t see anyone as weak or strong and judge at the very beginning. So I take whoever who comes along the way. When I was running my event business back then, I used to interview people and if he or she could start work the next day, I will hire that person. Today will I do that? No.
For any SMEs out there, you have to be thinking about marketing and sales. Don’t get too paranoid about operations because marketing and sales are the most important people that you need to hire. You’re an unknown fish in the sea and nobody knows who you are. You got to make a name for yourself.
So, if you don’t spend enough effort on how to make other people know about you and get paranoid about how to get things done, you will not be able to sustain and grow your business.
Marcus: That’s true. For AKLTG when you first started, how do you then get awareness because they were competitors doing personal development seminars, enrichment programs for kids and
Patrick: You see, the thing is, the company name is called Adam Khoo Learning Technologies so in the first 5 - 6 years or so of the business it was about branding. Adam Khoo my partner, he has always put in front. Anytime, if there's any media interview or award, Adam will always be at the forefront so that everybody knows him. That was one way to make sure we have many media write-ups in the past.
The second thing was our book business. He wrote more than 20 books that make it to the best seller list. The books are technically our paid brochures because it reaches out everywhere around the world and people know about us from there. The beginning part is not easy, but I think we were quite lucky because the amount that we spent on newspaper people know about us. 10 years ago, I used to tell my staff, “in time to come, everyone will know about us’.
When we first started, we were training 50,000 kids a year. Today, a lot of the kids are now grown up. They are in their early 20s to mid 20s. We are now seeing the positive effect of these people who had attended our training 14 years ago and today they are parents themselves and sending their kids to our program.
So, this is a long term business for us. We exist for the future and we need to make sure that we provide the right training for their future.
Marcus: Let me give you an example. I first got to know Adam when I was 12 years old. He came to do the assembly talk and that’s how a lot of people got to know Adam. I was very blown away by his talk because he positioned himself as not a very smart guy, but then was still able to get into gifted programs.
I remember saving enough money for his book. After that I did all the mind maps stuff that he shares and it work. I think the promise delivered. 10 years later when I was in my early 20s, I went to one of Adam’s courses. I think the progressional plan is there and it serves a very good purpose.
So, we talked about a lot of things, we covered the time when you began making sure the sales and teams are working. I think one of the interesting things that you’ve mentioned earlier is also to ensure when you first roll out your courses, the ‘SuperKids and Pattern of Excellence’, one of the very important things that you hold as one of your key priority for the company is to ensure that the company’s reputation is strong and earned the respect of the market. How do you manage to do that making sure that your reputation is strong?
Patrick: I think the first thing is, we have our own trainers that we actually set a very high standard for our trainers. Internally, we need to make sure our trainers are on the path
So for example, when we hired internal trainers, we actually do an audition like Singapore Idol. We actually get them to present, talk and have other trainers act as students to ask questions. From there we will select maybe 1 out of 100 or none at all. For example, right now we have a training program running, we will send them to Adam. Adam will run this training program for 2 to 3 days a year. There are two kinds of skills a trainer will need. One is the training delivery which means how you carry and present yourself to the audience. Then you command the presence of the crowd.
The second skill set is your content delivery and knowledge. The content that you’re supposed to deliver, you need to know what you’re talking about and able to answer all the questions that participants may ask you. These are the two things that we look out for. For the public seminar business, normally I would be the one who know and understand the trainers for eg; what are they looking for in life, in the business and if I find there is a match then we can work together and promote the programs under our umbrella.
Marcus: Could you tell me about the time that it didn’t work out with the trainer?
Patrick: There are times where, for example, the trainer is dishonest and have integrity issues. I was looking for training, performance and content delivery, but integrity issues are something that you do not know at the very beginning. So if you found out that the guy has integrity issue, it’s a clear cut there that we can’t work together. Once integrity is compromised, we don’t want that to affect our reputation.
Marcus: What about the time when it works? I think some of your trainers have been with you right from the very beginning like Conrad. He has been with AKLTG for about 10 years. So, what work from the very beginning till right now sustaining 10 years.
Patrick: I think first thing first, there is a lot of
Marcus: I’ve been hearing a lot from the market. One of it is among the SME owners where they are curious how AKLTG grows because Adam being the face of the company, there’s only that much of scalability that is possible. So, I want to hear from you, what’s your thoughts around it. Because for seminar business, there’s IQPC and Terrapin, which are like exhibition kind of company whereas AKLTG is more like surrounding Adam. I am interested to hear your point of view.
Patrick: So, when we first started Adam was involved in every single program of the business. I know we can’t rely on Adam forever. I used to have a KPI where I measure the amount of time that Adam spends in the business and the revenue that he generates then divided by the total revenue of the company.
Today, I would say that the value that he’s really involved in is 25% of the total revenue value. I would say among the programs that he handles, the revenue is not small. So, the idea was how do I keep on growing? The only choice that I have is to keep on growing.
Our revenues are above USD$10 million a year. It’s actually not easy because statically only 7% of businesses in Singapore are able to grow their revenues above SGD$10 million a year. We have been lucky that over the last 5 years, we have been part of that 7% group. It’s not been easy because for a service business and training business, after a while it gets tough to scales and that’s where the challenge come. We will always be talking about our growth and thinking where the growth is coming from and what we must do to grow further.
Marcus: That’s very cool. One of the last few questions is, so the company is named under Adam Khoo. You’re still like in the back seat, how do you deal with it yourself personally?
Patrick: I think first thing first, we have to remove the equal part. When we first started the company, we were very clear that if we were just another ABCD company, people will not notice us. Whereas if we called the company putting Adam Khoo the name in front, people will notice. And actually the pressure is on him to perform and excel. Our partnership is very unique in a sense that he looks up after his wealth academy business and some other training matters in the company. While he does that, I’ll do the rest because he doesn’t enjoy doing what I do and likewise I don’t enjoy what he do.
But it has been amazing is for the past 16 years of doing business with him is that we have never argued and quarrel before.
Marcus: Is that a good thing?
Patrick: I think it’s a good thing because for business is a bit different. The idea is when there's no quarrel or big heavy argument what it says is that the partners have a give and take attitude, have that open minded attitude meaning you are willing to listen up to each party.
So it’s not about whether Adam is wrong or right, but it was about sharing the opinion and decide what is the best thing for the company.
Marcus: Right, so could you bring me to the most recent time when there were conflicts and how did you and Adam resolve that conflict in a table seating format?
Patrick: I don't think I can recall any major conflict. I don't think we have any major conflict in the last few years that I can think of.
Marcus: So most of it is you just sit down and share your opinions
Patrick: Yeah, we share and we talked a lot. Although I don't see him physically, but we are on the phone and Whatsapp. We call each other when we are in overseas and I can keep the communication going on.
Marcus: Ok, well, I think that’s all for the interview and thank you very much for the time Patrick.
Patrick: Thank you Marcus.