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Tanner Montague came to town from Seattle having never owned his own music venue before. He’s a musician himself, so he has a pretty good sense of good music, but he also wandered into a crowded music scene filled with concert venues large and small.But the owner of Green Room thinks he found a void in the market. It’s lacking, he says, in places serving between 200 and 500 people, a sweet spot he thinks could be a draw for both some national acts not quite big enough yet for arena gigs and local acts looking for a launching pad.“I felt that size would do well in the city to offer more options,” he says. “My goal was to A, bring another option for national acts but then, B, have a great spot for local bands to start.”Right or wrong, something seems to be working, he says. He’s got a full calendar of concerts booked out several months. How did he, as a newcomer to the market in an industry filled with competition, get the attention of the local concertgoer?

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by Andrew Tellijohn
November 2004

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Get out


Get out

by Beth Ewen   Enough with the raging debate about whether outsourcing jobs, especially in the technology field, is good or bad. Rajiv Tandon says giving work to outsiders rather than hiring employees is reality, both because the world is getting smaller and because small companies need to get bigger with the least amount of capital possible.

Tandon is president and CEO of Adayana in Edina, which develops training materials for automotive, food, the military and other industries. He urges business owners to get out and experience the globe.

Upsize: How can small companies do outsourcing the right way?

Rajiv Tandon: The first thing someone has to do is be resolute, that it’s a good thing to do. People are torn between whether it’s good or bad. But before we get to that, good and bad, we have to say it’s inevitable, that the world is changing.

To argue that everyone should make everything themselves, it’s going back to the ninth century. The world is getting smaller and shrinking, so come on, let’s get real.

Upsize: There’s a lot of rhetoric that outsourcing is killing the U.S. economy.

Tandon: The Democrats are doing a disservice by even claiming that they can put things in place to stem tide. If the world becomes global, if there are truly free markets, the country that comes out the best is the United States of America. This is the only country in the world where we have people from every place in the world and access to every culture.

For example, we’re developing programs for automotive engineering. We’re developing them in multiple languages, because NATO wanted it. They have to do stuff in 44 languages. Now our company can go to Africa, we can sell to the Hmong. That’s what we have to start thinking. It’s a globe.

Upsize: Did you see the commentary piece in the Star Tribune, blasting companies that send jobs to other countries?

Tandon: We get so paranoid about things. You must remember when Japan was going to take over the world, but today, what is a Japanese car? Toyotas are made in Nashville.

Upsize: You mentioned that today’s business mantra is speed to profitability. What did you mean?

Tandon: Speed to profitability, that’s the true and tried moral. It’s so old it’s new again. In the interim, we had this speed to IPO, building revenue as fast as possible to attract the attention of Wall Street.

Upsize: You’ve run companies both ways. Tell me about your latest company, Adayana.

Tandon: We’re focused on providing performance improvement where learning may be the difference in performance. I’d call us a training company with attitude.

We started Adayana September 15, four days after September 11, 2001, and just a few days after we sold our old company. Those of us who were rendered unemployed by the sale, we had done OK financially, but emotionally we didn’t feel we had completed everything.

Upsize: You’ve just secured a round of financing?

Tandon: We closed on $2.2 million on the 3rd of September. The reaction was such that we’re immediately going after another $2.6 million.

Upsize: How is running Adayana different from running your former company?

Tandon: We started the company on September 15. You remember the stock market was closed for a few days. We knew that the old model was dead. We are at the same point with this company, and our total investment is about $9 million. For our old company, investment was $35 million at this same point.

If you go to a low capital business, you can’t do it yourself. You have to outsource. The outsourcing is accelerated. It’s no longer the purview of large companies for cost-cutting. If you stifle outsourcing, you cut off the formation of young companies.

The ability to create with low intensity of capital is a must for any young company.

Upsize: What about offshoring, or sending jobs to other countries?

Tandon: Offshoring to me is a simple extension of outsourcing. If you’re willing to go to Kentucky, why not Texas? Why not India? That’s not to say that jobs here aren’t important. Our present company has grown from zero to about $6 million this year. We have about 25 people full-time working in the U.S. These are new jobs created here. We have about 75 jobs total, but a third of them are here and otherwise there would be zero.

Upsize: You obviously see these changes as positive.

Tandon: If there were not disruptive changes, an entrepreneur could not succeed. Otherwise the big boys have it locked up.  I love chaos and disruption. That’s the only way I can have a chance.

Upsize: How can small companies do outsourcing right?

Tandon: There is no one way. The formula will have to be evolved.

Upsize: How do you do it at Adayana?

Tandon: You never solve a problem. You displace one set of problems with another set of problems. Now, as an entrepreneur learning to outsource, you have to learn procurement skills. You have to learn multicultural skills. You can’t be afraid to drive to St. Paul. You can’t be afraid to get your malaria shots.

Not having adversity for a while in this country, we’ve become very soft. We don’t want things to change. Ninety percent of the Fortune 100 companies are dead, that were at the top 100 years ago. You don’t even have to go back 100 years, just 25 years.

I think it’s a positive statement. It’s just like the 18-year-old looking at the 99-year-old. What if that person didn’t die? Nature has intended that the old fossil go away so the new ones can have a chance.

Upsize: How do you decide where to outsource?

Tandon: Where is it that the job can be done the best around the globe? For example, the design and creation of our concept is done best right here. But making copies of the same thing over and over, we have a company in India doing that for us. 

Right now we’re selling in two countries, and a little bit in France, so three. But we’re only three years old. Our goal is to be global.

Here’s an example of how this happens. There are 1.5 million auto mechanics in the United States, and 4 million around the world. Meanwhile, there are 1,500 job openings in Detroit with no takers. It costs $40,000 to train a mechanic here. Companies don’t want to put that kind of money into a 55-year-old. They want an 18-year-old. If I can be the company that reduces the cost from $40,000 to $4,000, does that change the equation?

My goal is to produce our product in 50 languages. Once I perfect that, I can sell it to 4 million mechanics all over the world. Then, as cars switch to hybrids, all those mechanics have to be retrained.

Upsize: How do you decide what to outsource?

Tandon: You have to know what you’re good at. I don’t do everything because I’m not good at everything. You have to discover what is your core competency. Keep that and send out the rest.

Upsize: How do you find your vendors?

Tandon: How do you find anything? Dig. Work. Look. Connect. It’s not that difficult.

Upsize: Do you like this environment better or the environment of the late 1990s?

Tandon: I prefer this environment, absolutely. The old way, it’s buying a lottery ticket and if you hit the right one it was a bonanza, and if you hit the wrong one it was a disaster. That was pure luck. Your own competency wasn’t needed.

[contact] Rajiv Tandon, Ph.D., is president and CEO of Adayana in Edina: 952.830.0610; rtandon@adayana.com; www.adayana.com