College Dropout To Building A SUCCESSFUL Unicorn - OYO's Founder Ritesh Agarwal | FO32 - Raj Shamani

Further ahead in my life, I have to convince the Investors, I have to convince my customers. So if I am not able to convince my parents, for supporting me. than who will I be able to convince. So, I actually think. parents can be your best support eco-system. It doesn't matter if you stay with them, or you don't stay with them. I say this very less, like very rarely that, Dude you're genuinely like an inspiration! and. It's very generous of you to say that!

So I may aspire to become certain people, because of n number of things, maybe, I like the way somebody thinks, I like the way people've built something, maybe I like the materialistic things, xyz right. I aspire to do alot of things, but. There are only few people who have like really inspired me in my life, You are one of them! And I tell you why, so I used to read Forbes alot. When I was in school, I was getting out of school. And I used to read Forbes like page to page. and because of that I used to read businesses. And I used to be like, I used to compare myself. Back in college huh!

Yeah, back in school. In 12th standard. Yeah. Amazing! Amazing! And this was 2012. So for people in 12th grade, if you want to build a new business, Do what Raj does! So 12th I used to read like top to bottom and I used to enjoy it. It's not... So I was... It started with a nac of, Who's the billionaire of India? Top 100 people, all of that. And then slowly I was like, let me see the young people who are building stuff. And I think 2013-14 your name started popping up.

2014 was it, I don't know. When you actually got a SEO? 2013-14ish. Uh I think 2015 is when our company really started becoming. 2014 or 2015 it became more visible. Yeah, so let's say I was in college, I started reading about the young entrepreneurs. When your name started popping up. And I started reading everything about you. And then, I found out, about Peter Thiel, through you. Then I found out about Thiel fellowship, through you. Then I found out, what is zero to one. Then I found out, what competition for losers is.

So, because, I started digging in your journey, I kind-off started learning about. How to build startup or what to do and how to focus on your strength. So thanks alot for doing this! That's very nice of you to say. I'll tell you this, that growing up, reading, all of these publications are best way to learn! And best way to like just genuinely seek inspiration right. So alot of people complain, they say that, you know when people. I grew up reading TechCrunch and. you know Plugged In.

which is to be the very popular news site. Then Yourstory ofcourse. All of these, Websites which talk about Entrepreneurs. and stories of entrepreneurs, right. So alot of people, say that, these publications make it look. so easy. that people want to do it, it's not as easy. You know it by now, I know it by now. But I actually feel, it's a good thing. Yeah. I think while people should know that, there are challenges, but I feel that, if you are alot naive, when you're starting up, if you know how challenging it is, maybe 90 percent of the people will not.

try it itself. Like including myself. If I thought it was very hard, I would've never tried it. Yeah. Given, I knew. that, or atleast I thought that it is super easy. and look at all these publications, they make it look very easy. So I should give it a go. So I gave it a go myself. So I think. getting inspired by these publications, and. wanting to make a difference. Fantastic! So, It is! Absolutely love it! And there's this saying right? What you focus on is what you become! Yeah. So, if you focus on this, let's say publications, entrepreneurship,

you feel that it's easy, you focus on opportunities, you will see multiple opportunities. and if you see focus on failures, you will just find the nacs and. and try to be like, okay this can go wrong, even this can go wrong, everything can go wrong. And then, that's how you fuck up most of the things! Okay, so... tell me honestly, Did you design it? From the beginning, like when you were. very young. I mean you are still young! but let's say when you were like very young. 16, 17, 18. Did you design your growth this way? That...

I'm going to start it this way, I'm going to make the Unicorn. Then I am going to become, XYZ person, and do this and that, go overseas, build India's largest brand! Was it all by design or... So first off, I think. you know, It's a very tough one, but, no I did not design it. ... answer right? Because... you know, as a 16-17 year old, who thinks that, you know you'll build a like. forget a big business,

you'll build a real business at all right? Like I think. I just had this mission of. wanting to make a difference. I wanted to do something good, I wanted to make sure that, so I'll give you a quick background about myself. I grew up in a town called Rayagada. This is on the Andhra-Odisha border. So i speak both Odiya, Telugu, and ofcourse Hindi, English. and so on. And I am the youngest from four kids. Okay. Right. So there's 3 elder siblings of mine.

Two elder sisters, one elder brother and I am the youngest. So all the elder 3 siblings were Asian parent's dream. Engineering, Business School, Good job, Everything right. All the tick marks that you expect from Asian parents. I was the black sheep. I always wanted to do something different. So our parents were like okay, we got 75% of the portfolio right! This one will see how this turns out right. But you know credit to them, I think,

you know, because my eldest sister, you know was good in educations, she wanted to make a differrence, I've always seen that the elder sibling, sort of inspires the other siblings to pursue a certain path. So I think because she was responsible, I was half as responsible atleast! So anyway, long story short, I went to Kota, Rajasthan, for my 11th and 12th grade education. Okay. It was partly because I wanted to pursue Engineering, Okay. Okay tell me honestly. Was it your choice or you were forced by your parents or... Elder siblings to do this?

So you will understand that fully, when I tell you the second thing. It was absolutely my choice! But the reason was very simple... I wanted to be, as far away from home as possible. Because I wanted to pursue my. whatever entrepreneurial or new things that I wanted to do. And I figured that from Rayagada to Kota, will be a 3 day train journey. Right. Because you've to go from, Rayagada to Bhubaneshwar, Bhubaneshwar to Delhi. And Delhi to Kota. Okay. It's 3 train rides right? So,

you know I thought that, you know nobody's going to come visit me. I'll go visit them. So I have all the time for myself. So this just makes you feel like it would have been more deliberate. But you know, look I think. and also I am veyr thankful to my parents, to consider that. Because you know, all my 3 elder siblings, they went to places, in and around. the place I grew up at. Like you know the town I come from, if you go to, Barampur, or Bilangir, these are smaller towns in Odisha. Those are considered like, Cosmopolitan Upgrades.

Okay. From, you know for potential 11th and 12th grade right. where people would go to. and there are great education options there. So but for me I just wanted to, be closer to. you know. cities where new businesses were getting built or something new was happening. Because I wanted to be a. part of the story. I didn't know what I will do. Why I will do. And this, idea got started. because I started selling Telecom simcards, when I was in my 6th or 7th grade. At 7th, you started selling simcards?

Yes, just as a summer thing. To do something new! So that got me thinking, this is very good. I want to do more and more of these things. So you know, I think that sort of inspired me. to come to Kota. I think right after 12th grade, there are 6 months between school and University. I was naive enough to think, I should start a business of my own. Guarantee, I think, now-a-days when I reflect back. if I knew. 20% of what I know today, I would've never tried. So that's why I said Naivete is good. The less you know the better. Because then you atleast think you can do it. Because you don't know how hard it is,

how risky it is. It is. You know your journey makes me feel like. you're a poster boy for 2 things in India. 1. Like the Entrepreneurial dream, Indian dream. Everything go hustle, do it. When you are young, you can go build something right. You are the poster boy for that. And you're a poster boy of. everything Indian parents don't want you to do. Right? Because, I mean. Okay. Tell me. do you suggest. that, those who are watching this right now, those who want to become an Entrepreneur,

if they. get a thought that. because. I am at my own house and I am very comfortable. or my thought process is not matching. So I must get out of my house for some time. Let's stay away from my hometown for a few months or a year. And let's try out something new. Do you suggest that? People should do this or no? No, I don't think I suggest that. I think what I suggest is, see I'll tell you, after 12th grade. when I decided to do this, I had this open conversation with my parents.

I called them, I said this is the situation. Ofcourse they were quite disappointed when they figured that. I was planning to do something like this. But my view was saying that, further ahead in my life, I have to convince the Investors, I have to convince my customers. So if I am not able to convince my parents, for supporting me. than who will I be able to covince. So, I actually think. parents can be your best Support Eco System. It doesn't matter if you stay with them, or you don't stay with them. Actually on the Internet, on various sites. there's a thing, which says that.

you know, maybe I have said this. that stay away from your parents. I don't mean that. I say that, it's okay to. you know, not okay, I actually encourage you to. stay with parents, but to the extent. you are able to have an open conversation with them. Yeah. And convince them. And you know some people say that. they don't agree or their thinking is different. But it is critical to know that, if you want to. convince hundreds of people in the future, Investors, Customers, Partners. You want to convince all of them. These people are just your parents. They will understand, it'll take more hardwork. Yeah. As it will take with anyone else,

But you've to be willing to put in that hardwork. But linked to this is the other perspective right. Which is saying that, when you're growing up, it is also critical to. surround yourself with the right people. I've always learnt, atleast I've learnt this from myself. You're always the average of 5 people beside you. Okay. Whether you are growing up, and like you said, what you learn from. Whether when I was in my senior high school, whether it is, when I was building my company, or whether it is today. I try to surround myself.

with the five people, I aspire to become like one of them, It's challenging right? Because you'll always feel, you're outside your comfort zone. Because all those 5 people are better than you. Yes. That is the reason, you're trying to become like one of them. So when I was growing up. I woukd try to surround myself with. the kids who were, wanting to do some new science experiment. or were wanting. or with people who were trying to sell telecom simcards. Which are people, nobody else wants to surround themselves with. Yep. And there will always be, and you know I am sure. among your viewers you'll find people.

In a classroom, there will always be those 10% kids, who would think that I want to try something new. In those times, instead of trying to conform to average, trying to say it's okay. I want to try to do something different. And there is a lot of successful opportunities in that. Like when I was growing up, you know in a class everyone is asked right, saying, What do you want to become? Yeah. So they'll say Engineer, Doctor... You know there'd be like 2 or 3 things. So, once right, just like. as crazy as it sounds,

once I had heard about the word Entrepreneur. I had no idea what it was. It was just a different thing. So I started saying after that, that I wanted to become an Entrepreneur. Right, like. I know nothing about the word, what it means. But it was new right? But being able to. chart your own path, without having to conform to the. Society norms. normal perspective is fine. But you have to be willing to then, walk that path for a long time. Because it comes with it's own set of challenges. Similarly when,

you know I was starting my business, I tried to surround myself with. primarily small business owners who were. Hotel owners. Because I wanted to become a. Subject Matter Expert. of small business owners. who run hotels. It's a very different ecosystem right, for a 18-19 year old. to spend his/her time with, right? But, it is fantastic, I learned so much. and they have all ended up becoming. some of my best friends even today. And I was telling this to you earlier, small business owners are so good, that if you become systemic to their business,

you'll be long-term successful there's no disagreement to that. So, these people you know. if we make a mistake, they'll send me a whatsapp. saying Ritesh this is not correct. This service in your app is wrong. Due to this I feel my neighbouring hotel, won't be joining your system. I want to make sure OYO is so successful. Because if OYO is very successful, I am very successful. So surrounding yourself with the right people then. and ofcourse now I try to surround myself with people, you know, ofcourse. still continue to be my hotel owners. that's not going to change all my life, my clients. But I also try to surround myself with people,

who I want to learn from, who are the best product creators, who are the best brand creators, because I want to learn from them. So, pushing yourself outside the comfort zone, and surrounding yourself with people, who are examples of what you want or aspire for is something. that says, is something I encourage. is more important than acually leaving the house. or anything of that sort. Infact, you just pointed out right, all this is going on, on the internet. Even I had read something like this. I think it was posted on a page that, in the beginning years, stay away from family. - Ritesh Agarwal.

I want to clarify. by using Raj's episode. that I don't believe in all this. All I want to say is, if you. want to do something. then you will have to ensure. that your parents can become your very good support eco systems for that. But you will have to first discuss with them about this. And if you are away, or at home, you've to start learning to live. you know, in a manner where you are. self dependent. you've to make your own bed, like these are all very personal traits.

But you've to start to do more things by yourself. That is the other thing I recommend. So, I also believe in the same thing, so I say. when people tell me that, you know, that we want to convince our parents. So, I was doing business with my family, and we scaled that business. From 16 to 23 I was doing that business. And we scaled that business from, let's say, we. when I joined it was X, and when I left it was 22X. In just, a few years right. Wow! And. it was insane. So it was growing, I had a very good relationship with my parents,

and then I left. And now, I've built a career here. So people say that, how do you convince your parents to do something like this? And, I also have the same thing. that, if you want to convince someone whether it is. a Customer, or an Investor. You will have to understand them first. Firstly you'll understand them. Then you'll understand their needs and wants. Then you'll understand what they want. and where they have difficulties, you'll be solving them by. providing a solution. Right. So, here you have to start your journey from ground zero. You already understand your parents.

So convincing them should be easier for you compared to your customers. If you want to build a business, and you want your thousands and lakhs of customers. to learn from you, and. you want them to buy your product, and then you understand them and do things in the future. Instead you first understand your parents and explain the plan to them. Correct. How will lakhs of people buy your product when you're not able to convince 2 people. Absolutely! And see many a times it is not necessary. that your parents understand all your products and business strategies. But, whether they understand or not, it is our responsibility. to make sure that we atleast.

try and put our earnest effort. To try and make the difference. and you'll find it that. you know, people generally mean, good for each other right. Generally, your parents are family to you. But regardless people mean good for each other. I know that, some of your viewers may say. that they've found people who don't mean good, etc. But atleast. you have to believe of the world, something that you want the world to be that, so that the world will. you know, behave the same way with you. Wow! So I think, if you feel people are trying to do good for you, then you'll. see that atleast 70% people will do good to you!

It's okay there'll be 20-30% people. will be there, but on the outside just smile! It's okay! Which is there. The 2nd thing you said like. you started investing alot of time with. your small business owners. and. my journey was also similar. I found out a product market fit, in search in like a typical language. was dishwash gel for me. Because what I did as a 16 year old, I had it in mind that I had to do FMCG products. Because I had read a book, Think and grow rich! And there was this guy, Andrew Carnegie,

he said you must make a product and business out of something. that is used on a daily basis. Something you get habituated to. Something that never ends. Recession proof. Then I thought things like these are bought at the grocery store. Right. And as a kid what would you feel? Yeah. Everyone is always going to need soap for bathing. Everyone is going to continuously need flour and grains. So I started spending alot of time with these Grocery stores. I would just go there and stand. And just observe them. And then I observed that, the. In 2013-14, the world was shifting to liquids. Hand soaps were getting replaced by Handwash.

Bathing soaps were getting replaced by Shower gels. Yes. And Dishwash bars were getting replaced by Dishwash gels. So I would've. never got to know this insight, if I would've not gone and stood at the stores. that people pay more for the liquids compared to the solids. And that's how I started a business in the Liquids. And then we built it. So it's very important, as. someone who's watching that. to spend that time with small businesses. Right. And. with small business insight, I want to pick this up. that. I was reading that. there are 2 types of businesses in today's world.

Tech for Good and Tech Consolidation. Right. So, maximum amount of people say that. the tech companies that exist, they come for small business empowerment. And then after that. they control and consolidate so much that later they run the power. So how do you feel, that you are empowering people. or do you feel that this is not the case with because. I understand. that an OLA driver. who first used to earn nothing, now with OLA he's earning alot. But technically, in one way, OLA has alot of power now.

Where, they can decide which driver is going to earn how much. I don't know if they're doing that or not. I am not claiming that. I am just saying it's alot of power. Do you think, it's a good power or a bad power? And how can you use it? And how is OYO using it? Because, if you are building like the largest chain, then you will be one of those key players. who will have a moral responsibility of. the growth of all the people who will be connected with you. And it doesn't become. the power good. which. stays beyond your. like let's say after you leave.

How are you going to ensure. that this is going on the same mission? So Raj see first of all, you said. you used to stand and observe the grocery stores. First of all it is very important to understand. India is a country where. the whole economy is fueled, by small businesses. Whether it be a Grocery store, whether it be an automobile shop which is nearby, whether it is a cobler's or a blacksmith's shop, or whether it is a small restaurant nearby. A restaurant is like.

a small shop right, where you get your food from. If you have to get it from outside. Small roadside food cafe or stall right. These are the people, driving, not driving. Thriving and leading Indian Economy. Right. So for the technology Ecosystem. the most valuable job is to help these businesses. and make them even more successful. There will be companies who will say, no. I will come in and create a better. blacksmith store. I will come in and create a better grocery store.

I will come in and create a better repair shop. These are 2 models of building businesses. My perspective is that. in India because small businesses are so systemic. and they are run so smoothly. India is by design an Entrepreneurial nation. Yeah. Here people are always thinking about ideas that. what business they can run. I am from gurgaon. In Gugaon, each and every person is involved in Real Estate. There's not a single person who is not involved in real estate. Everyone has one or the other business in real estate. Right. So I mean it,

you know, in a good way. That a large number of Gurgaon's population has something to do with. Real Estate. And that's why. Gurgaon has become such a big real estate hub also. And it's very good that, people beyond what they are doing, they want their own side hustle. They want to keep doing one thing or the other. Correct. So that kind of thinking is fascinating to me. and I believe that, that is why in India. if you have to be successful as a business leader, no matter what business you are in. you have to do business with. small businesses and empower and make them successful. The 2nd thing that I want to share.

What I shared with you earlier as well, experience is cheap. And Reflection is expensive. Yeah. Which means that standing at the Grocery store. is frankly, while valuable. it makes not much of a difference. Many people are sitting at the Grocery store. Infact, you know, growing up in Rayagada, I used to see, a television used to be on, people used to sit and have tea. People used to spend alot of time. So people were getting experienced. everyday in seeing Grocery store dealings. But nobody was reflecting on seeing that.

Dishwashing bars are getting replaced by Gels, Grocery stores now also sell telecom recharge, now inside Grocery stores, Amazon deliveries and. E-commerce, Amazon, Flipkart. all deliveries are being enabled. So they're becoming now, the local Eco System leader. versus just being the, seller. And hence, bases that I will build a business. which can either be a dishwashing gel, or, being a hub and spoke. besides themselves.

So that is why I believe that, if, you are. getting to experience something in your life, don't keep that experience limited till there. Always ask yourself, that from this experience. what all can I reflect and do better? And I do this at OYO all the time, right. Like, you know and I think, this is a good segment to talk about. Tech's power for good, right. Yes. I believe that, tech has to be for the good. if it has to be sustainable. It will by design, I think the good news is, the Fundamental Law of.

Economics and Commerce, says that, if 3 people don't win, it will break. It is just, and it has been proven, time and time again. Okay. Can you explain it further? See. With an example about. who are the 3 people to win? So, for example let's say, there is a big digital platform. which sells ads. Okay. Right. And the, there is a small individual business. Right. If the individual business does not.

make a marginal, additional profit, by doing business with that. Big. Platform, then at some point of time the small business owner, will either have to. you know, stop doing business with the big person, it is not sustainable. Yeah. Or, will try and find. workarounds. To try and take advantage, of the big platform, without having to pay them fully. Right. Or the other way around. That is, the small business owner is.

benefitting. but the big platform. is not ablt to survive. Yeah. Then at some point of time, the big platform will say that, I can't create value for you. So, good news is, in the world of. Commerce, there is. if sustainability has to be brought, it will, always come. at the value creation for. all parties. If 1 party is not. creating value, that system will breakdown at some point of time. That's the.

belief, I atleast operate with. So you may say Ritesh, this is an Utopian world. But the reality is, in today's world it is not true everywhere. And. you know, we read about it all the time. I think that's a journey. You will see. some situations where people don't fully follow it. And companies will get, feedback that they should improve. If they improve it quick enough, then they will, survive and thrive in times to come. And if they don't. respond to it quick enough, then. the model will break,

and something. Now coming to OYO specific, right. So, at OYO also. we've had. 2 segments of journey. Until 2018, you know, everything was going fine, our owners used to say. thumbs up, you're doing a great job. We used to say you're doing a great job. Life's good. We were all growing together. I think in 2019, for the first time, and you may have seen, some of the news report as well. Where there were some feedback, from our hotel owners, saying that OYO needs to improve. Yeah. Now, and they had, and they had 2 or 3 primary reasons of feedback.

I will explain what those are. Now in that time, there are 2 ways one could've dealt with it. One could've said that, okay it's only. 5% or 10% of the owners, 90% of the owners. don't have a problem. so let's live. you know on the same manner as we are. Or the other was saying that, every marginal owner matters. Now, they may or may not believe it, but atleast. we should talk to, each one of them, listen to them, and do our best! To make sure that. we can learn and become a better company.

I, and our company, chose the latter. So, we said we acknowledge that. there are problems. We'll not. shy away from it. because there are. you know certain percentage of our owner. saying this, while it may mean that. some other percent of our owners are happy, but these owners have a problem and. you know. our job is to make sure that they are successful. So there are 4 things I did, and these are things that you know if, your business is. needing to align more of the. small businesses around you, you may. try and take it. you know, as an advantage if you feel like. The first,

is I started doing. monthly townhalls. Okay. With 100% of our Hotel Owners. And I still do it today. Okay. Where, all our owners join. and 100% of the questions, the good, bad and. ugly are discussed about. Right. Straight Communication. Which is, saying that, we will not just. hear from you, through our teams, through feedback forms and so on. We'll all sit together and talk. I have realized, hearing, two sided views. makes life, incredibly easy.

Okay. Because, my ability to, appreciate some of the challenges. without hearing it directly from an. small hotel owner, and for a small hotel owner. to appreciate. why we have made a policy, with hearing it directly from me. made life significantly easy. Right. And it sounds non-scalable right. It sounds non-scalable. But, I have learnt, that doing non-scalable things, also create the most value. So I chose to do it. So, that's the first one. Yeah. Second thing.

And it's a good one. Yeah, because. It's a. very good one. That doing. non-scalable things. actually create most value. Because you know, most people, spend time saying that. I want to scale my business. But, before scaling. it is important for you to know that insight. about how you are going to scale it. You won't know the insight, if your ears are not close to the ground, if your eyes are not close to the ground. Yeah. So, back in the day. when I was starting OYO, before starting OYO, for 100 days I stayed at different hotels.

And after starting OYO. for 2 years, I didn't have a house. Everyday I would finish work, and then I'd go and stay at an OYO hotel. It also works perfectly, for me right. Because, you know, the hotel would do the laundry, they would clean the room, you know in your own house, alot of these things you've to do it yourself. So it worked well for me. and OYO's are ofcourse. great experiences with the right price. you know, our consumers also believe it. but I believe it definitely. I was an OYO customer for a very long time. So there you go right. I hope all was good. Yeah. Yeah.

Infact, If I used to go to, small towns, there. it is very difficult to. trust. Which hotel should you trust and which one you shouldn't. And trusting OYO, you used to get a hotel room in around 500-1000 rupees. I remember, for about 999 rupees, there was some offer. I used to buy that only. Infact, in Bombay. I've stayed in 999. And that's a very good price. Think about it, in Bombay. 5 years back or. 7 years back, if OYO was there, I've come and stayed here. when OYO was not there. It used to be. exceptionally challenging to. find even a good quality room for.

2000, let alone 999! Right. You'd go to like some, like, I'll tell you I stayed in a room, which was actually a sharing room. Where I paid 1900 rupees, before OYO. Right. In actually, this area only, Andheri West only. So it, used to be very challenging. Now finding a place for. 1000, 1500, 2000... which is a clean room now. Alot of our customers, complain that. the rooms is Mumbai, are not of the same size as Gurgaon. But you know, that has just to do with the real estate of the city. But, I think. you know, for that price,

that location, that quality, we try to do our best. And that's why consumers like us. So, I think. this is the 2nd one, that is. you've to keep your ears close to the ground and. I tried doing that. And that's helped us. Second, there were. 3 primary issues, that our owners were giving us feedback for. 1st issue, was saying that, we used to pay our. small business owners, once a month. Right. And their perspective was, Ritesh, you manage. your payouts, or your company's payouts, in a manner that, you say that, okay we have this. 15 days credit period, and after 15 days, we'll payout to the people,

who are, our vendors. But in our business, it doesn't work that way. In our business, if we have to pay some person, In the next morning, if the person shows up, in the front of our shop, we have to pay the money. Okay. Right. So we need, cash much quicker. So even if our business may, go up like two, two and a half times, that business is only valuable if, we get cash very quickly. Yeah. Right. So we move, from a month. to bi weekly, to now there are, any owner who gives, 3.5+ ratings, they get daily payouts.

To a place where, last time I was in Mumbai, I was in Mumbai a week back. so I went meeting, bunch of our patrons, I went to meet Javed bhai, I went to meet, Shukla ji, bunch of our owners. And, their feedback to me was. actually you shouldn't do this daily, instead you should do this bi-weekly. Because the money comes so often. that it becomes difficult to handle it. They say. very well that the payment is done, it's been bi-weekly since a month, and that is great. Infact you can make it weekly now, that is not an issue. So this is 1 feedback, that we used to get, so we changed that dramatically. Yeah.

2nd feedback we used to receive, is resolutions. Earlier, we used to have only physical field people. So if you had a problem as a hotel owner, one of our team members will go and, help you. What we realised, from alot of our owners is that, there are alot of minute issues, for which you don't need somebody to physically show up. And if somebody, physically shows up, it gets a little delayed, it takes some more time. So, in order to make it easy, we tried, to now setup a, bot system, where we have a bot slash chat experience, where if you have any issue, you ask there, and we will resolve your query from there, and ofcourse if you need somebody, they can come.

But that's a, L2 or an L3. It's a Level 2 or a Level 3, rather than a. Level 1 resolution. Yep. 85% of our issues, now get resolved by using this chat or chatbot. based ecosystem. Right. This has dramatically improved, not just the quality of experience of patrons, but also the cost structure. Because now my, field teams can focus on bigger things. Rather than focusing on tactical issues, right. And the 3rd thing was the pricing. That is our patrons wanted to, try and, have us appreciate, that sometimes, we would price too low.

Or sometimes, we would price too high. Yeah. So too low is in the sense of, saying that, if there is a snowfall in Shimla, you should assume, alot of people will drive from Delhi NCR, Punjab, etc. Like at that point of time. So in those places, we may be able to get, 5% higher price. At the same time, if there is a city where, you know, let's say there is. you know, a festival due to which, let's say in Bengaluru, durig festival, most people will, go back home. Yeah. So due to which, the Bengaluru city. travel will be lower.

So that time maybe it's important to, drop prices a little bit. So while most, details, we're able to get. by using our Data Sciences, some details we did not have. For example, weather pattern was not. a part of our pricing logic earlier. Yeah. So, now we've given. our patrons, we call our hotel owners patrons, a way to give us feedback, on pricing. Saying that there is this event, hence, increase or reduce prices. So, not only do we change it for that day, we then built it as a. part of our logic. So now, basis weather pattern, our prices will dynamically change.(doubt). Wow!

Right. So, we're able to learn from. market changes and our own owners, and make further improvements. So I think, these 3 things, we have changed and. we're at a significantly better place today. You'd rarely see now-a-days, owners complaining about, over the last few months, publicly atleast. Privately in our, townhalls. There's always got to be problems. Because you know, it's an evolving journey, but, if we were perfect, then we would not need to exist. We are all evolving, but the good news is, now we all operate as a family. We say that, okay, all these things are going good, but this one thing can be done better.

So, I have a believe in life, okay. Based on this, that when people complain publicly about everything, for the whole world to see. then they don't trust the person. they are complaining about to solve their problem. And when they don't complain publicly, that means they trust the person to solve their problems. Like, even if we look in our homes, if we know that, our mom and dad, if there's an issue that our mom and dad can solve then, we go to them. Or else we'll tell our brother or any other family member to help us.

But the problem, which I think my dad won't understand, that problem we share with our friend. We share that with others. So, similarly in the business as well, so now that if, people are not coming out publicly, and doing it privately, it means, like, they have started, trusting back again. Do you differ to that or, do you think it's the same? I fully agree right. I think at the end of the day, every business has, continued areas of improvement. In that process, when you're business partners, great relationships are built. When you can have.

tough conversations on both sides. So, the first time, when a business partner, or a colleague of mine, has a tough conversation with me, saying, Ritesh, you're doing this wrong. Or this is, this decision is wrong. We should not be doing this. Or this is a business that we should not be investing in, I tell them that. whatever happens for OYO, it is secondary. But I am truly happy that, our relationship will get stronger because of this. Because the 1st time, where both of us are able to have a. heart to heart conversation. And we will now know each other. I will know, how you think and.

you will know, how I think. So, infact my recommendation to you is, that if you are building a young company, or you are frankly even personally, I encourage you to have that, one heart to heart conversation, sooner rather than later, At that moment, it feels very painful. It feels like, it is, avoidable. Feels like, why is this conversation so difficult? Our friendhsip is going so strong, we're are always laughing and playing. But when you have a tough conversation for the first time, the bonds that those conversations create, are significantly longer,

it's actually quite ironical, right. Yeah. Infact, the conventional thinking should be that, if you're only having god conversations, then life will be good, there'll be no issues. But what happens is, both the people are, hiding the troubles that they have with each other. It is impossible. There is no relationship, that can be there with, no 2 people not having disagreements. Yeah. But if you're able to talk about those disagreements, maybe both the parties, won't be able to solve each other's issues 100%. But atleast, they'll be able to, have that conversation, and will be able to,

appreciate each other's point of view. That is 50% of the battle war. So I fully agree with you, that trust is built, only when the. opposing party, or any one of the parties, believes that, this is a conversation, the other party is willing to have, and is willing to make ammends. Until both of these things are true, people feel that, we'll work together as a team, we'll make this happen. And that's true. Not just for business relationships, it's true like you said, for personal relationships, for family, everything. But having, open hearted conversations,

is as crucial, don't keep it in your heart. or up your chest. Yeah. Okay. Tell me, let's. shatter it down to, ground level zero, okay. You said, it's very important, to have those. conversations early on. Okay. And you said, building this, building that, process, design, etc everything is very important. Where do you learn all this from? You didn't go to college. Which college did you go to? I did not go to college. You didn't go to college only! It's mentioned on wikipedia, you went to ISB and everything. So I went to ISB for three days.

Three or four days a week I think. They were very nice to, let me then pursue. what I had to, I think they're doing very well as a, College. But I never really finished college. Okay. Right. Because I went to the Thiel fellowship, and then, you know, I had to sign a contract, that I'd not go to, I'll stop out of university for two years. But I think more, important than that context is saying that, I have always believed and I think, This was actually the first line on our Thiel fellowship contract, for those of you, who don't know, what the Thiel fellowship is.

There's this person called Peter thiel, who founded Paypal, early investor in Facebook. I first saw him. in actually this movie called the social network as weird as it may sound. And, I started searching about him, and these are the days when you know you used to use, internet from the cybercafe nearby. Oh yeah. For ten rupee an hour. You know Internet usage. I searched about Peter thiel and I. started searching who this person is, and I found about the Thiel fellowship. I saw there was no one Indian resident, who was a Thiel fellow before me, so I was a little disheartened. but I still applied.

I thought, Let's just apply and see, then who knows if it, if it works. And the questions were fantastic right, like the amazing questions that otherwise. I would have never received. So I felt that no one has ever asked me such questions. And they have asked the questions in the form, so i must answer. Long story short. Right after, you know, my application, in a certain period of time. I got a. you know, a call saying that you're in the top forty candidates. and have we'd like you to come to. pitch to the United States to San Francisco. Boss I went from,

Rayagada to Kota, to Mission district in San Francisco. So it was a cultural shock of, a completely different proportion. And it was two or three days before the pride parade. In San Francisco which happens around, the area so. I just learned something completely different in the. city and, Met so many different people, learnt so many new things, in the city but, It was the first time I got an, you know, on any international flight I used my passport for the first time. A complete, You know what I feel,

you know I'm very thankful to the Thiel fellowship for that. So anyway I was. again I thought, I've come in the top forty, it was the first and last time I've come to the US. So I wrote, two hundred cold emails. To people, saying that , I've come to the US for the first and last time. Because obviously I won't get selected for the Thiel fellowship. They've called me here for the top forty, that's very great and I'm thankful for that. but will you let me explore your city? So for example, You know god bless his soul, Tony Shay, who started Zappos, Yeah. I had read his book.

So I wrote him a cold email, he hosted me at Vegas at his apartment. Wow! Right. And he also of course. his team give me a tour of the zappos office. All of this as an eighteen year old, was fascinating to me but, All of this was just, hustle right. Which is saying that, US is the first and last time I have come, Because, just look into our lives. So what was the exact email. I want to know that email. What was written in the mail? Because it is a very important lesson for everybody. No I think, first of all, I'll tell you how I found out, that we can write such mails. So, when I was starting the company I used to,

like, we couldn't afford full time employees. So we just had our interns with us. So I used to ask my interns. how they applied in the company. So they used to answer, that they mailed 200 people. and we were the ones who answered. So we came and joined your company. So I thought, this I should also apply, Yeah. I should also like, I thought if in US, I want to meet two entrepreneurs, I'll write mails to 200 people, out of them atleast two will be ready to meet. The rest. 198, will maximum deny for the meet or they won't respond. We as it is don't have any expectations,

so let's just try. So the emails said, Dear Tony, I'm Ritesh. I've started this company, which is trying to provide accommodation for people here in India. I'm very early. in the game so I don't have any big business or anything. I'm very thankful that the thiel foundation have invited me for, top forty. candidates. And I have, put my best effort for the pitch. You know, and. I will, try and make it when I'm landing there. It doesn't matter whether I become a.

fellow or don't become a fellow. But I, It's a. probably, an unique opportunity. for me to see the United States I've heard alot about the country. I'm excited about solving problems in India only. But I want to see US, and I've heard a lot about Vegas. and your work in Vegas downtown. He's been doing, donated, almost. Hundreds of millions of dollars to. upgrade the Vegas downtown. So can you please, you know, let me come to Vegas, I have no money to come to Vegas. or stay there. so it will be very nice of you if you can help me with it.

So this way, like, most people didn't respond. So to be fair, but Tony Shay and god bless his soul, you know, he departed from the world last year. But, he responded saying that sure I'll have our team. look at it. And you know it was fascinating to me. That you know. that happened.So, I think, And this is not just something I did for this right. like even for reaching out to investors, for employees. Everywhere I used to write 200 emails after which 5 people used to respond. Because life is hard right like,

I didn't come from, a college where I could call or reach out to my ex colleagues, ex or, classmates. I didn't come from a company where I could call, my ex. team members and colleagues. So, How do I reach enough people? I would reach enough people by just, you know, writing to them. and you do what I did was. back in the day that used to be a tool called Rapportiv. I don't know if you remember. R A P P O R T I V I think LinkedIn only bought it. So it was a tool, or a free tool, like a chrome plugin.

In which if you typed, the first name, last name and. company name of the person, It would, you know, you know what you believe is their email id. It'd tell you whether that email id is correct or not. Oh! So that was a hack. And what I used to do was, I used to do. first name at the rate company name dot com. First name dot last name at company name dot com. and I tried ten permutation and combination, And in Rapportiv, one of them was correct. An what Rapportiv essentially did was, they could check whether that. email was connected to one of the social ids or not.

That's how they checked whether the email ID was legit or not right. So this way, I knew that I was writing to the right person. Now out of those some people don't respond, but that doesn't matter. Yeah. That the difference between, young hustler and most of us. I used to go to the Cybercafe to use Orkut. You're going there for Thiel fellowship. That's the difference but also, I also started writing alot of emails to, Start speaking around the world, So, I applied, in the United Nations to become the youth representative.

Wow! To give speeches there. At the age of seventeen. I was like I want to speak, and I'll go and stand there. And surprisingly they said yes. And the best part is. every year, for one specific topic only, one person gets selected. From the whole country. So, they get 192 people from 192 different nations. And from India, I got selected. And I'm the youngest one. Once I go there, I was like, now I don't want to go back there. Like, I want to do something new now. So I started doing the same thing I started writing emails to, every MUN, UN, colleges,

college organizers, in fact I saw that. colleges didn't invite me for giving speeches, so what I did. I went into those colleges and found out student names, from their names to their instagram id, then I used to personally dm them, that, you are the head of this commitee, so this way you can give me a chance, to speak in your college. And that's how I used to text two hundred and. one used to reply, to give speeches kind of similar story. Okay so where do you learn? This was the primary question. I think the first, You didn't go to college. So, first is to reach out to enough people.

Because, To your point , which is saying that. if not college than what other learning opportunity, So, I was going to Thiel fellowship. so finally I got the Thiel fellowship, I'm very thankful to them. So the first line of my contract was, It said we never let university, interfere with education. So it is a bit. thoughtful. But what it essentially means is that educationi is everywhere. Yeah. You can go on field and learn from our, hotel owner Mr. Shukla, or from Javed bhai. Or you can learn from your own team members, Or you can learn from your customers,

Or you can learn from your ecosystem, Or you can learn from your college. All of these are just ways of learning. You could learn in any of these. places right. So for me I have found five or six, ways of learning. Which I hope that you know. some of it maybe I. don't think all of it will be but, some of it will be valuable. to some of the other entrepreneurs. Listening to US. I think the first thing that I care a lot about is, reading. I spend a lot of time, reading. And reading is a combination of three things, I read of course, books.

I think a lot of people do it. The last one I read which I, am a, actually, the last one I read that I recommend is actually, No rules, rules. I think it's a, fantastic book written by Reid Hoffman. Sorry not Reid Hoffman. Reid Hastings, the founder of Netflix. What an amazing book right. It just. When I was reading that book, it told me that alot of those stories were. similar to other night. The, they had a crisis. They unfortunately had some of the colleagues depart.

It was emotionally the hardest thing they had ever done. But, with the colleagues they had, and the support of the alums they had, they recreated Netflix to become the company that they have built. So I think a fascinating book. So I think that's one. Second. Reading is most important. Okay, I want to break it down and then we go to the second point. Tell us, top three books you want all of us to read, as an entrepreneur. So you know I will actually tell, Not. I'll tell books but I think along with books, I'll tell you two other things to read. Okay. The first thing is in books.

You know no rules, rules. I think zero to one is a very very crucial one. I think that is something, that, You know, It goes without saying and of course, it's written by Peter Thiel so, I have special, love for it. I have a signed copy of. of face zero to one from Peter Thiel. I'm jealous. And then, the third one I would say is, you know, The hard things, about hard things right. I think. Ben Horowitz. Ben Horowitz's book, I think that's another and he's of course.

among entrepreneurs, considered the, you know, the star. So I think these are three books. What are the other two things? The two other things that I'd like you to read I think, Encourage people to read a lot of. business and startup leading publications on current news. Alright. Like you know the ones that you were talking about earlier. For two reasons right. The first one is just generally for, You know relating yourself with those people right, like relating for saying that. I want to be a problem solver,

I want to make a difference around the world. If that's of interest for you. And if you want to be an architect, then spend time reading about architecture, AD. like architecture digest fantastic right, and bunch of other publications. But I think. Figure out what's your calling, and then their specific industry publications if you can. And for startup entrepreneurs, I think there are a bunch, I will not call out them. But you should know that there are just, many of them like, around yourselves. So you can call out one which is in the progress to build it's called.

three things to know daily dot com. Which I'll be building. Absolutely! Three things, to know daily dot com, takes the cake. Everything else is also valuable. Right. And the third thing that i'd encourage you to read, or at least I think the third one is actually just, videos, I think this new world. Access to YouTube. is just fascinating right. And of course you you are of course a, Massive successful creator in that. I think, YouTube, audible,

I think platforms which are, audio/video, are just incredible ways of learning. Because in just reading platforms they are quite valuable. But you don't get the emotion right, like you don't figure what's in between those lines. Yeah. So I think, listening in, To at least three or four or five. a key videos regularly as a way to constantly learn. and you should do it. Like for example, I was fascinated about geopolitics. as you know that's been impacting businesses quite a bit,

at least global businesses. over the last year. So there are a couple of channels. I'd listen in primarily about geopolitics. about. Again I don't make decisions based on that. but I'd like to learn about current affairs from people who, lead for example, Schools of our government. Or schools of public policy, because that's an area that I had never thought about. and I thought it's an interesting area for me to want to look. So this is one, that is reading in these three segments. Second thing that I believe is also quite valuable,

or a way to learn from. Is, bringing in fantastic colleagues around yourself. It's brick by brick. This doesn't happen eaasily. but having. top quality colleagues is just, remarkable way fo learning. Whenever I come to my, every Monday morning we have what we call as a management committee. So all the leaders get together. we review our previous week and we talk about our future week. And various details. I'll tell you, I have, a good sense of insecurity on that meeting every Monday.

Because. there are, multiple Harvard business school grads in that group. There are multiple people who have built their very successful businesses earlier. There are at least, Five. you know, top consulting company partners or. past leaders in those firms. These all people who are very accomplished. And when. I go into that room, they bring opinions and views. that are so thoughtful and so organized, that sometimes I feel like,

are they doing more for making OYO successful than I am? So what that has led me to do is, two things. first a good sense of insecurity makes me prepare for that meetings very well. yeah. so Sunday evenings I will start preparing for it. I've not told it to them, but I prepare very very hard. So that's why people in the meetings feel like. how is this guy so well prepared, he's bringing new insights. that's because I deliberately planned for it right because, I want to come in that room and also. add value. I think it's a great thing and the. reason I call it a good sense of insecurity is critical.

Insecurity is of two types, bad sense of insecurity which is when you are constantly feeling that. am I creating value in this room why am I here and so on. Second is a good sense of insecurity, a good sense of. insecurity makes you a better person. So you're the average of five people beside you, the five people beside you are just stars. You will, like it will push you, beyond your comfort zone to become a star. Absolutely agree to this. I learn from, people in the industry. So I always see that who does this particular work, the best?

If I have to learn, how sales are done, so I will reach out to somebody at Airtel, who has run. large field sales teams, and was the CEO at that point of time. Cold emails. Today, the good news is, More people respond than, they used to, back in that day. Actually most people respond, I'm very thankful. people give a lot of appreciation. So I think that's a very good thing, I try to reach out to people. who have done a great job. but this is something, I've tried to do always. Fourth, Agenda less conversations.

A lot of times when you're meeting your team members, young colleagues especially, when I say young colleagues I mean people who are. associates, senior associates just joining the company. Spending time with them without an agenda. just truly asking them. what are you spending time on, what are you learning, what are we doing right, what are we not doing right. Learning from the last mile, is just fascinating. Right. I try to surround myself with those people to try and learn from them. Yeah. Quite a bit. And you know I'll end with this I think there are many other ways to learn.

I can, which I had used to learn. Before I come to. just two last things, I download a lot of apps. Okay. Right. Like I download hundreds of apps. So, Product hunt, App sumo. And. App stores. Are my favorite hanging out place. Okay. So, on weekends I'd spend two or three hours. just downloading. hundreds of apps. and just seeing what product managers are doing around the world. Because you know, if this like,

if you can get the learning of a thousand product managers, without having to recruit them, Why would you not. Right. I take all the learning and we all as a team, and I just don't do it now our entire. product team does it. and every week. I or some product manager will stand up and share with everyone else, saying what did we learn from our. quest of twenty app downloads. Okay. It's just a fascinating way to learn. Especially, when you are a product company right. So I think I can go on but I just wanted to end with saying that, I think,

Fundamentally going back to what I, shared earlier, Entrepreneurs have to be quicker, Faster. And more which is, Larger, Learners, Around themselves. because they have to constantly think one step ahead, they have to constantly think one step ahead and. unfortunately and you will feel this as an entrepreneur already, if something breaks down, nobody's here to tell you what to do next. Yeah. It's you. Everybody around you is looking at you saying you will tell them. What to do.

right. It's a very unique privilege. as most people see it as a challenge but I see it as a. privilege, it's an honor that, So many people trust in you like you said, now like after that if you can make it work, then you know, we must all be good enough, at least I think I must not be good enough. So, These are the things I do to learn and I hope some of this is valuable to. your viewers. Definitely valuable dude this is, This is a crazy thing. even if somebody picks up one thing and goes deep down inside. to learn more about it, they can be. a very better learner. and they can learn like a lot of stuff themselves.

Well, I have a quick question, Okay. It's very evident. and everybody says that to build the right team, to learn from the colleagues, get higher like smarter people than you. How do you find smarter people? In fact. In fact I have a bet, the other version of it. sometimes, you feel that some person is smart, but that comes at a price tag which you can't afford as a small business. Yeah. Then what do you do ? I think it's a great question.

Talent building right. So the first one is how do you find good people, so the first thing is there is no science to it. It is a brick by brick. On this, You know, they say you have to belligerent. So you'll have to be. able to keep, Fighting hard, Long enough. And there'll be light at the end of the tunnel. So, what did I do. So. let me actually not share what did I do, let me tell. what Peter thiel did because what. he built at the Paypal mafias is an inspiration,

for entrepreneurs around the world. So for people who are listening to this, Peter Thiel had, built a team of ten people. most of them ended up creating, unicorns, decacorns, or. You know hundred billion dollar companies. I think, now, Elon Musk woking with him at, Paypal now is I think trillions of dollars of company. So a lot of, You know, people who worked at Paypal, as partners or colleagues I think have become very successful. this eventually has gotten the name of Paypal Mafia. So I was reading one place, where how did he recruit these people.

I actually, got the honor to ask him in person as well, but I'll tell you what I read first, before I tell you what he told me. I think. in the reading, What I constantly learn, what was written was saying that, we are two smart people, we asked both of them who are the ten smartest people you know. And we went and recruited, eight or, nine or. Or of the ten of them. So that's effectively what I did as well. That is bringing in the first two or three colleagues was exceptionally hard.

Yeah. But and at those three places, it was beg, borrow, steal. Write it on Linkedin, upload profiles, reach out to your friends, meet them. But, hundreds of people you'd meet. And. these people don't just have to be good enough, they have to be good enough, to also believe in you so much. That they're willing to take a bet on you. To charge no compensation. It's very it's very weird to imagine right.

for people to say that. No, I will trust in you. And some people can't believe it, and others don't have the resources for it. because you know everybody has their own, constraints right. We have to also respect that some people, don't have the wherewithal to say that I'll come and work with, by taking this risk. Right. So finding those people is extremely hard. I was lucky to find them in the early days. But even today we have to keep the same thing going right. So referral is by far. one of the best ways in which we recruit talent today, that is we reach out to people saying that who're the best people to recruit.

Second good news is we can, Pay well today. So we, we ensure that people feel like they're well compensated. But I always say that, you should always seek. not money creation, but wealth creation. I can make money from compensation and so on. But at OYO we have, hundred percent of our employees, actually now, if we consider some of our off role staffing. I think almost seventy to eighty percent, twelve thousand employees, current and past of OYO, alot of these are past employees, who would've left at some point of time.

Each one of them has an OYO stock. Woah! Right. and all of them have created some wealth. In the company so they're all in the money there's nobody who'll say that, you know, I'm not in the money. Intense! Right. That is true wealth creation. yeah. That is not just money creation. Money is just compensation you make something, and and move on. So I feel that wealth creation is something, that I believe is not something that, Today I see that more and more people appreciate it, but we started investing. in it back in the day. So for example,

we were probably the earliest to ever do a. Equity buyback. We did it I think in 2015 or 2016, at that time no one did all this. And the reason I did it, Was because I wanted to prove that this equity has a real value. Because alot of times, people used to say, equity is just paper. Then we used to tell them that it has a real value. So as soon as we buyed it back, Suddenly people appreciated that there is real value and after that. they made a commitment as a board. that we'll do it every year from here. And we've consistently done it. So just give. now what has happened is, when we do buybacks not enough people.

are willing to sell it. Yeah. Because they say that, now we know there is value, so, we are willing to hold on to it. Of course if people have some, requirements they, choose to do it people also want to evolve their. choices in life and lifestyle. So I think my perspective is, for good talent, you must be belligerent. So, you'll have to fight it there is no easy way out. That is by far one of the value you will. add as an entrepreneur and as a management. But, Once you bring the talent. Keeping them is 10X more harder. And you know we're very lucky that,

we, Have a relatively stable team. where almost none of our colleagues have left. the company, ever since they've joined them. Joined us. Our CXO group almost, seventy percent of us, I have spent, almost seventy eighty percent of the time in the company. So bring in top talent then keep them, for as long as we can. and even new people who come in they also end up staying for long enough. so we try to, And I ask them saying, why do you stay? And I think the biggest reason is. if people truly feel like an entrepreneur with you know. Nobody wants to leave. If people feel like they are an.

employee, I think they don't want to leave. An accountable entrepreneur. Sometimes people feel the meaning of Entrepreneur, is not accountability. Not having accountability is not the meaning. Responsibility, and accountability come together. Responsibility and accountability comes together. And I think, when people feel like that is entrepreneurs. I think they accept. I also feel that, if, your employees at any point, feel that they've stopped learning, There's nothing new to learn, they drop out even if you pay them well. It's. like they need to, at every given point they need to feel that okay.

Today if I'm coming here to the work, I go off as a better person. Absolutely! I think look, I think this is such a good thing you've called out Raj. Team members don't just, Leave. you know, not just team members leave because that one day. Even. entrepreneurs. who are not pushing themselves to become a better person next day, Lose interest in pursuing that business very quickly. Yeah. Especially young, like millennials right. because we're in this fast paced world of instant gratification.

So in this. I absolutely agree with you and. that is an example of agenda less conversations. speaking to the front line I think, You know obsessive. at this morning I met one of my colleagues. I think there's this, word we spend a lot of time talking about, which is, Obsessed, obsessive about your front line. That is your frontline team members, who are your associates team members who are just. starting their careers with you. Making sure that you spend a lot of time with them, to make them successful if you do that, your company will be successful. Not only will they stay,

everyone above them will also stay. because they're successful than everybody else is successful. Yeah. So I fully agree with you. So is there a model, or a process where how people can take their business from 'X' to '10X'. A framework. Yeah look I think I'll break it down into two parts. Okay. The first one is, What does it take to scale up a business? And the second one is what to do before the scale-up? So I think when you scale up a business and again, in my view again this is something that will be different for different companies. So please don't consider this like a,

Model that one can replicate hundred percent. I think there are, the first one, is to ensure you have a playbook. And playbook is just a word for it but it essentially means that, whatever motions your business does, codefying it to the simple, human being. so there is a new person, who comes and reads those. five or ten or fifteen pages, they should understand what you do, how you do and why. Process note. Like a process note equivalent right, so our playbook in the early days meant,

You should go to, Hotel patrons. Who, are ideally offline and if they're online they do not know how to. manage that premises best. They're in good locations. They have parking, basic perspectives. The other hotels you should go to, so how to choose your hotel. Second. After you choose your hotel what's the proposition. Will give you this business jump, will give you OYO OS and Co-OYO which are our softwares. By using this you'll be able to get more business and manage your premises better.

by using our software. But their expectation is that we'll be your exclusive distribution partner. across channels and we'll be your. service partner, brand partner and so on. Then the third thing is saying now that the proposition is in how do you sign them. and bring them onboard. So there is a platform called. Internal OYO Orbis. Orbis will send a link to the merchant, merchant can accept it by reading all the terms. and can. move ahead. What will happen and how much time will it take for the hotel to go live, when it goes live how do you know the customer service is good,

what do you do for the first week, third week, fourth week. and after fourth week it becomes stock. and then the relationship manager to review it. So this is all basically what happens in, The journey. Of let's say launching one new hotel on the OYO platform. Yeah. This effectively translating into a playbook. for whatever business you are in will be valuable. And hence, before that, and I'll keep. moving between before that and after that. Before that it's important that you yourself and your team. should have done it three, four, five times. To know that this playbook works.

Yeah. Because if you don't. know that whether this playbook works. you write there and just start scaling. So you'll end up, frankly even after writing this, after five times. because five is a very small scale, you'll always get it wrong within five to twenty. but this, chances of error or the percentage of errors will be lesser. so that's the first thing. So playbook is critical. Second, good talent. In the early days when you're scaling, over optimize for good talent. Even if it means that you're needing to bring in people.

You know for a certain role, probably you know who are one level more qualified for it. Because. in the early days you need people who. can keep control, spend more time, review the situation, can make personal decisions to change the playbook if they feel like. If you have somebody who says like I'll follow the playbook to the T, that's the problem right you need somebody who's also smart enough first principle's. oriented to make these decisions. The third thing so, start with. playbook. Second get the right person. who will come in and play the role.

And the third one, Is ensure that you have the right cadence, Cadence in the sense you have to constantly discuss and review. in order to make sure that whatever changes you have to make you can. make those changes relatively. And the fourth one is, watch for costs in these times. Scale and costs are almost directly proportional. Technology driven companies, driven companies should be, You know, Generating operating efficiency. Right and I you know we've made some mistakes on this earlier.

So it's critical that we are thoughtful about it, so I call it, P P C C. Focus on playbook and people. And on the second hand focus on cadence and cost. Okay. If you do this four things right I feel, reasonably comfortable that, You know there is a high probability to be successful in scaling up, and I believe that, you know, India is again a market. Where essentially scaling while not easy, is probably, you know,

give the privilege to scale in India. Yeah. Because they're a country of a billion people. We are, You know, among the world's biggest economies. We're. knocking the doors of the top, Three economies as we speak. So I think, you know India is a place where, you should be asking yourself why am I not scaling, Okay so for scaling there's one more thing apart from your PPCC model, I think there's one more thing which is very important, and it's in the blood in India, It's the bloodline of every Indian,

that's jugaad. So I want to ask you like a quick thing. What's the most Jugaadu thing you've done in OYO's journey? I think, see jugaad is, you know, jugaad has many definitions so of before I come to that. I think, jugaad has many definitions. But I think, In my view there is one kind of jugaad. Which is basically saying that, I will try to hide a broken thing. By putting a, Gb over it.

Right. And the other way of jugaad is, being creative in problem solving. Yeah. For tough challenges, for which you don't have enough resources. I think the second form, I call it as, You know creative jugaad. which is, truly value creative. Frugal innovation. Yeah frugal innovation. So I think under that, I'll give you two or three examples. We started a company, without having money for branding or marketing. We thought how do we do it how do we do it.

So, We started putting signages on hotels. Today you will see those bright red signages. No matter which part of India you are in, Which part of Indonesia you are in. which part of Malaysia you are in, Which part of. London you are in, you. like. it's very hard to miss. those bright red OYO signages. Right? They are actually not as expensive. As it is to like have a TV ad or get actors, You know. by media and so on and so forth.

So it was a frugal innovation, to say that. use signages to reach out to enough number of people. The second innovation that we pursued. Was being able to. convince our, You know. early. You know. merchants to join us. So we used to all like always go to our patrons. and one of our ask. used to be. do you like your. Value creation so far. Yes, he used to say yes perfect, business growth has come and so on. Then I would typically.

or our teams would typically say. Mostly small hotel owners know all the other small hotel owners. So, we used to ask them. to select their entire phonebook. And send them "OYO is a great company". This is Ritesh's number. Please call them immediately. and join the platform. You know, people used to call us saying that, You know in India. In small businesses, In the movie 'Three Idiots', there is this dialogue. which is saying, it doesn't hurt that much when our people fail, it hurts more, when they top.

This is true for small businesses as well. If, there are two small businesses. and your small business is also not doing good. then there is no problem. But if the other business starts doing really well. then it becomes a problem. Initially, when our first owner started becoming successful. Then many people started calling from that route. That, 'Hi, are you speaking from YOYO?'. So, people used to call us YOYO back then. 'Hi, Are you speaking from YOYO'. We used to say, 'call us whatever you want to, we are at your service.'. They said," We want to get attached to your company, because with you we will get good business.". So I think. these are just basic.

hacks and you know we have of course now. systemized all of these things. For example photography, we saw design of the room. played a very important role in click through rates. So we changed white light to warm white light. Colorful linen to white linen, single stripe satin linen. Basic things bed lamps, portraits. and we saw it from the top five hotels. We used to go on OTS. or websites. and see the designs of the top 5 hotels. We used to try and do the same design in our hotels by. recommending the owner to make those changes.

That started creating a lot of business and. then we translated that into a platform called OYO frames which is an imaging. sciences tool, which gives you a rating based on a photo. and few suggestions on how you can improve your CTR. So, you should design better. It's like how Netflix creates movies nowadays right. So, That's the second Jugaadu thing. and the third thing I would not call it jugaadu. but I'd say or frugal innovation, I'd just say. Especially when you're building something grounds up. with limited or no resources.

in a. market which is not yet fully proven. with no past background, a lot of these things I had tick marks on. Again. I'm not saying that out of excitement. but i just didn't have tick marks. on those. Actually today I'm saying that with excitement let me change that I guess I'm saying. that with excitement but I think with that. Life comes with a lot of challenges and the. and things that are thrown at you. are incredibly challenging Raj and I will tell you a few examples like those,

and. the reason I say this is to say that. that like. the one big take away. that I believe is valuable for any entrepreneur wanting to build a business, is resilience. and believing that there is light at the end of the tunnel. Right. Because a lot of times when life throws challenges at you. People give up too early. yeah. the difference between. a super successful entrepreneur, like I always say right.

You know when I was starting up. If I met somebody at a cafe they used to say that, "Did you see that busineess which succeded?". For example, Flipkart. "I had the same idea, I just didn't execute it.". People say this and you must have heard it. So, I always used to think when I used to meet. Them I used to think that. Do I want to be the person who said that "I had the idea of OYO. but i didn't execute it.". Versus the person who did do it. I had this clarity in my life to execute it and make this happen. because I know that there is a problem here to be solved.

I will solve this problem and create an impact. So I never wanted to be the person who. says that. Because I gave up too early. I. am not the person who's solving this problem. or is not a part of solving this problem. So I think to this extent I used to live in. Delhi in a. 'Barsati'. I don't know if you know what a 'Barsati' is. 'Barsati' is like a. room made of a thatched roof above the house. in Delhi. So, used to stay there initially.

and after that you know again another room. From both the places. I have been removed. Why? Because the deposit got over. All the money got spent in work. If I called my family, they would immediately tell me to come back to my hometown. and start my business from here. or. no not business but complete your studies. whether college or university. So, I used to constantly think that I can't do it. Right? So I have had these moments like I and you know. the good thing then. is that you're so young it doesn't bother you right?

So I remembered. you know one of these days. I'll not call out. but the landlord said It's over. You're out tonight onwards. thank you so much. But after locking the door and taking the keys. he forgot to take turn the Wi-Fi off. So, I hung around on the same stairs for that night. I stayed on those stairs only and used the Wi-Fi. I had no problems. Nowadays I look at it and it feels like. like, what was I even thinking, did I have logic? Why was I doing this stuff.

But I think, Perseverance in those times. like I remember. you know. I think I. like I don't want to. glorify these times, so I'll actually cut short of this. but I think I just want to share that. When times like these show up. It is. It is very easy to say that 'it happened'. Right. And this is true for most. and I've read. about two entrepreneurs.

Apple was going through bankruptcy. while it was very close to bankruptcy they survived. Our inspiration who have acieved 100x. or. thousands of x. Better companies than us. and also bigger companies. they have gone through this. Elon Musk was almost. Bankrupt. when he was funding SpaceX and. so was an inspiration for all entrepreneurs including myself of course. We are all inspired by. what. Elon Musk does. So I think. in a lot of this context it is just fascinating. that. everybody goes through these challenges.

The difference between. creating that size of outcome or not. is before anybody else are you a believer. and for that are you going to be perseverant or not. And in that for different people with different resources the problem should. be different. For some entrepreneurs will be two months of money left. For some entrepreneur it would be. stopping to take salaries personally for some time. For some entrepreneurs it would be an investor who is not willing to support you. For some entrepreneurs it would be some. trusted colleague of yours leaving midway in a very important time.

For someone it would be a client. dropping out at an important time. For someone like me it would be being thrown out of your house. but you know. I'm sure every entrepreneur goes through it but I'm just sharing that for new. entrepreneurs. I think it should just be seen as something that they have to be perseverant about. this is one thing I always encourage. You have been perseverant about everything and have scaled it big. And I have this problem. Which I think you're solving. I want to know. The problem is if you look at India.

Our culture is. too much. inspired and influenced by American culture. The food we eat is McDonald's. The brands we use is Apple, Whatsapp and all of these right. There's no. Indian brand. Who's actually out there. You talk about like in India we have Starbucks, in India we have Apple. in India we have, Your. just like I. said right now, There's McDonalds. Everything's there. in fact American clothing brands, shoes everything is there.

But. there is no Indian brand that is outside. There is nothing. What's the reason and. do you think OYO is going to solve that and is already solving actually. So. so you know I think first off, It's important to just appreciate history before we talk about the future right. So I think historically. you know. we are, Indian entrepreneurs have always been very enterprising. There was manufacturing in the start. Move to export things.

Even before the silk trade, this, that, we used to, we were. thoughtful exporters and people always knew that, if the products are coming from India. they're of good quality. Then came the last. Few decades. Of what is our service enterprises. yup. and you know. icons of the industry. Mr. Murthy, Mr. Nilekani. they built companies. And ofcourse. Mr. Chandrashekhar, they built companies like the Infosys. Tata Consultancy Services and so on.

Which have demonstrated to the world that. You know. Indians understand how to build like or people, companies from India know how to. build great softwares. Now my perspective is. We've figured out how to manufacture. We've figured out how to develop great products. All we have to do. Is make sure that. instead of reaching out to customers. Via other platforms. Also which is a great way, Now we should also try and reach out to users directly. Over a period of time. So this is the first context of.

Solving for. at least not just me but. This new generation of entrepreneurs in India, who are saying that, We want to create products. which are not just products which are white labelled or provided for other companies, which are products that directly customers will come in and buy. By choice saying that I want to buy this, and I want to buy it from here. Their products work very well for me. The second perspective within that is what does it take. I think.

In the previous world it was harder. Because there used to be a significant cultural difference right. You've grown up in India. Overseas cultures are slightly different. Every country will say that, our culture is a bit different. But today two or three things are changing that, All linked to technology. First. Is earlier if you had to build distribution, through physical means. It used to be very expensive yeah. Now you can just be on the app store and people can start using it. So it's suddenly very easy to distribute your product. Second.

Cultural barriers are easily broken by technology. Because of the colour. Kind of the court. Doesn't change with. which country, the features may change a little bit. But. Code remains the same. Yup. That's structurally cultural barriers get bridged by technology. It's a great barrier enabler. And the third in my view which is. also very exciting to me. Is the. power of digital. To be able to learn about each other.

I can learn, meet, connect with each other and so on. So I think these three enablers which is. Digital as a way of distribution. Digital as a way of breaking barriers cultural barriers. and digital as a way of learning about each other and connecting with each other. These three in my view are enabling new-age. Brands. to be able to reach out to enough people. With a very low cost. It's like startup. Ten years ago, starting a startup was very difficult.

Not ten, twenty years ago. You didn't have a cloud, etc. Now Amazon or Microsoft or. one of the cloud service provider right. Oracle or somebody will come and give you. a coupon. For saying that the first 500 dollars on us. Come to us. Right. That kind of. ability. which dramatically reduces the cost of starting a new company yep. In the same this now expanding globally is becoming cheaper and cheaper by the day. Yeah. so we can be building in like. you know Patna or. Bhubaneshwar.

and the service can be made available in downtown San Francisco. without like. any concern or. I think. OYO and companies like us are making us. significant. push towards making this change. I think. OYO is doing alot of it. and. Urban company for example is available in multiple geographies around the world. Cars 24 is become available in alot. Countries around the world. Zomato is available in multiple countries around the world.

Byjus is available in multiple countries around the world. Byjus actually. doing an incredible job of taking our. Products to different parts of the world. so just fascinating that. This new generation of. brands. which are consumer brands. They're not just. softwares. there are consumers coming in and purchasing them at a retail price and enjoying that experience. and you know. like for example if you drive around Texas. it's hard to not find an. OYO right.

Especially in some critical freeways. So we believe that. we will want to. not just ensure that. OYO. becomes that company. Viewed. Atleast my request would be twofold. Entrepreneurs and professionals listening to this discussion. They should know that the cost. of growing globally which earlier was though t be a massive deal. has dramatically reduced. Yup. But there is a lot of value and focus. so you don't need to be launching all countries at once you need to learn like I said. Playbook.

do. two three times yourself, once you learn it, then expand. And we've learned about ourselves. and the second thing which is even more important. Is I think the also have a responsibility for that. Because you're building such amazing products in our country. Every country when they have become. Economic. enablers for the world. They create companies which are. world champions. yeah. right. so. You know in in it's own times. Japan created it's world champions right. Sony,

and. You know. and and a lot of other companies out of Japan that became. world champions. In US. multiple companies that came as a. world champions. So I hope that there will be more companies that come out of India. And we are certainly working to see that if OYO can be one of them. but I'm sure. it's not just one company that can do it. It's a group of, Entrepreneurs who all and our team members who all have to be hungry for saying that. we'll make this difference. But at OYO we will do it in a very thoughful manner. We will not want to do everything at the same time, recently we announced that.

not recently, two years back. that we'll be focused just in India, Indonesia. and North Europe. As our ares of expansion and growth. And we're very committed there. Everyone else our software is available. People can use this and we'll continue. Keeping a close eye. on seeing as we perform, we will continue to investing or. continue reassessing this. so apart from your three things that you said it has become very easy for the world. to do it. I think there's one more thing. Because of why everything has become very easy to go global is content.

yeah. because. I feel content. shapes culture. Culture builds communities and communities brings change. So it starts with content if you are putting as a company you're putting up right. content to actually bring the change out. You can do it very easily and you can go global because language is no more a barrier. I mean. You can, even if you're doing it in English. I saw one of your. One of your videos which Nas did on you. That got. That got turned around in I think seventeen different languages and they all have.

views and everybody knows your story. so that is a great way to bring. Content at the forefront to lead the change and let the world know about your story. and your company. so that's also one way in which people can expand. No, I think. the power of content and content creators in the current generation we're living in. is unprecedented. And the reason I believe so is like you're mentioning content. Influences cultures. That's a very. core anchor of. you know what the world is seeing.

as we speak right. If. content. which people connect with by design, a content is worth it's salt only when enough. people want to watch it or relate with it and so on. So I think in that context. you're absolutely right that in the new world we live in. One of the biggest reasons why global is easier. is because people appreciate the content of different cultures a lot more. and hence are a lot more open to considering new things. So I believe that content will probably be one of the biggest enablers for the new.

globalized. you know, way of operating together. On that note, this is the question of the day we ask this. to every guest. Every guest has the same question. is. What do you think. I can do. or we can do as a company here. to. go 10x from here? How can we improve? What can we do better or where can we go? like what can we do beyond? Look so first off I think you should know that. you're doing a fantastic job in enabling.

Content. Which is. Truly value additive on a daily basis, right. That is. People come and consume this content and then, Take something out of it. that is valuable for them. And I'm so glad that. You figure a way out to make sure that you. take out as much as you can. I think that's a fantastic thing that you do. My perspective would be that, given you're creating such fantastic content. Making sure that it reaches to as many people as valuable, I've been seeing. that your recent views have been.

growing like this. You were in the thousands then tens of thousands and hundreds of thousands now. you're dealing in millions. So you know all the more power to you and everyone in the team to continue to do. better and scale up from here. But you know. that when you grow I think you'll always have this. fascination which I. you know certainly until now its not come but there will always be this fascination of saying that, How much should we dissuade from adding value to users. versus distribution.

I think. You should always solve for adding value more than distribution. So while today. you'll focus on scaling but whenever you have this challenge and you will have. every company has this. constant question of saying that. let's introduce these two types of content. it won't be valuable. but we will get distribution. I think in those places be thoughtful about not getting there, so far you're early in. the game. You're. Doing an exceptional job you're someone that. people revere. Its very inspirational to me how you've. gone from.

I didn't know about your. business that you're building with family by the way. That is. Just fascinating to me that you built a real business. Grew at twenty two x. And then said. I'm going to leave all of this. and do something completely new. And the world of content creation is a tough one today. Because. you know you have to bring distribution. purely by good quality content. Even at a time where some platforms, I'll not name which ones. it's harder to. get the content out there if you're not. You know. Putting dollars behind it.

Yeah. So really reaching out to people with good content and virality is a. is a tough one. and you know you have. you're among the few people who have gotten the skill that you have. Now it's about the. you know. doubling down. As we say in our job. Yeah that makes sense and. I think that's a constant question which we ask ourselves. Whether to build distribution and add more value. and that really solves. for a lot. You know I always say right. There is supply and there is demand.

India is a supply constrained market and not a demand constrained market. but what I mean by that. is saying if you. create great content. People will find their way to it. But if you find great distribution. Doesn't mean that you'll be able to find great content as an outcome of it. so you know more power to you for continuing to create great content. thanks a lot man thanks for doing this. Really appreciate that you. gave time and came down to the studio. We are sorry that we didn't come to you. We wanted you to inaugurate our studio and be the first guest here.

Our office is not very far from here so I get to come to your. studio and then go back to work. Lovely. Thanks for being at our pad. Thank you thank you for having me here Raj. More power to you keep winning. Thank you so much. Thank you so much.