Read what Ritesh Agarwal, founder of OYO said about his Roller coaster Entrepreneurial Journey.
EVENT: YOUNG TURKS CONCLAVE 2018
RITESH AGARWAL SPEECH TRANSCRIPT:-
Thank you so much for having me here. Always heard great things about this event and its an honor to be here.
You know today the topic was taking an Indian startup global, Now we are just getting started in that journey so I feel it is still very early for us to become like a big global giant and so on.. so long story that needs to be written in the years to come, whether good or bad but regardless will take the opportunity today to share a few things, one I’ll first introduce by telling a little bit about myself and our company and then maybe few stories that I have had access to being a part of this amazing company called OYO.
SO, hi I’m Ritesh Agarwal, I started OYO hotels roughly four and a half years back. The mission was very straightforward, how can we create great living spaces for a common man in India. In the last four and a half years we today managed India’s largest hotel chain close to one forty-five thousand leased and franchised keys which is close to double of all the other branded hotel chains combined.
So not only South Asia’s largest hotel chain, the top four hotel chains in China and increasingly opening over 60,000 franchised or at leased worldwide, making us the world’s fastest-growing hotel chain as we speak.
We are lucky about the impact we get to create. Every night across the world, At least 200,000 heads are on our hotel’s pillows… as a place which they trust and it wouldn’t have been possible without the support of the Oyo-preneurs distributor leadership and of course the broader startup ecosystem because I generally say I publicly grew up in front of the broader Indian startup ecosystem because people have seen me right from the time I used to be a hungry young teenager to now when I still believe that I am still young and hungry not a teenager anymore and you know hopefully will continue building the company in front of all of you with your support and blessings for the years to come.
The first story is about growing up and having big dreams. I believe that having the ability to dream big is one of the most important attributes of building a large impactful company. I had a dream when I was a young kid that I would be able to do something new and unique.
As a part of which you know initially, I wanted to be an airline pilot but one of one of these days my eldest sister who went to an engineering college came back and said I had gone to the Entrepreneurship Fest, right, I didn’t know what this word was.
This was very new to me. So I tried to Google or you know not Google at that time Oxford Dictionary, searched about the name and I found out somebody who solves a problem and makes business along with it.
I felt this is fascinating after that every time you know a lot of time teacher asks that you know what do you want to be when you grow up so when the teacher used to ask me I felt everybody is giving very mundane answers like you know I want to be a pilot I want to be an engineer and so on so I thought I’d be an entrepreneur. Not like it was not an intent it was just trying to be the nicer kid in the class who people would ask wow that sounds like a nice word what does that mean right.
So that’s how it started long back. But that’s where the first time I got inspired to say that well you know doing something like this there is respect because people tell you that wow you are doing something different. Of course, reality was starkly different when you really start trying to be an entrepreneur.
I grew up in a small town called Raigarha which is in the southern half of Orissa. Fairly Naxal infested but I loved being there, because you know if you haven’t seen the world outside of that you feel like that’s the best place to be in because there’s no relative.
But everyone post tenth read who scores above 33% goes to a bigger city, so I came to the northern half.
We were four kids, all the three elder kids did engineering business school with financial aid so family had slightly more money left from the provisional store business they used to run. So they said you can go far into new places.
I came to Kota, everybody felt I was going to Kota for engineering preparation but the reality was that is the farthest you can go from Orissa, it takes three days in a train to come from Raigraha down to Kota. So my intent was I cannot do whatever I really want to do without family interfering with it.
So that’s when I came here I used to take weekend trains from Kota to Delhi and come and be a part of a lot of these conferences and listen to a couple of entrepreneurs. A couple of entrepreneurs I was very inspired by one was Rahul Bhatia at Interglobe and the other was Sid Lal at Eicher Motors.
Both were building fundamentally amazing consumer products, Sidlal was turning around Royal Enfield and it was becoming very successful. Indigo was fantastic airline business, hard to make money in Airlines, there among the more profitable companies in that segment.
But for customers both of them the reason why I found them innovative is that I feel there are very few Indian consumer products that you take to any part of the world and it wouldn’t feel out of place and I felt ROYAL ENFIELD and INDIGO were companies like those.
When I saw entrepreneurs around me I felt I don’t want to surround myself with the other school kids. I want to also be an entrepreneur or at least learn from these guys. Good thing about Kota was attendance is not too much not required very highly. So I moved to Delhi lived in a Barsati here and worked for most of the people had seen around myself, for year and a half and would go back Kota for examinations and score well enough for my family to feel good.
So long story short these dreams led me to one day apply for something that’s called the Thiel fellowship. Peter Thiel who started PayPal, an early investor in Facebook, he gives $100,000 to 20 people across the world but the condition is you have to stop out of college. The acceptance rates are lower than any other Ivy League’s I was the first Asian resident to be at Thiel fellow.
That was a turning period of my life. I think partly that was lucky for me as well. I feel very lucky because I don’t think I have got the US visa given my background of aspiring to be a college dropout from India but thanks to the US Embassy that they chose to let me go to the US so as among the 40 candidates who finally pitched and you know the first Asian resident to be one.
Now but there were two things I learned in the fellowship program:
The first was what was in the contract, The contracts first line said as Thiel fellows we never let university interfere with our education. Which means that education exists everywhere, university is just one of the ways to get it.
So I feel this is fantastic, you get paid not to go to university and you still learn on a lighter note but there is the first thing right which I felt very inspired by but there were the second thing that I learned was thinking very big. I think generally you know my parents always told me that annually your salary should increase and your cost of living should be flattish, that’s sort of the life that you should absolutely aim for. And the first time I was there in the Bay Area saw people saying that you know there’s this guy who has a company which has just like 20 customers and he says I want to be the biggest in the world doing this .
So I felt the scale of ambition is just dramatically different and the second thing I learned is being innovative is absolutely okay, which meant that in India a lot of venture firms I would meet would always ask me this thing of saying that what is your GC? not the general council, it is global comparisons. So they could tell their LP’s and other partners in the US saying that we are investing in this company which is an emulator of this company in the US. But there in the Bay Area, I didn’t see any of the other entrepreneurs saying that hey, I am emulating this from Russia, because everybody was building their own new thing solving a problem.
So these are two amazing things I learned back there but of course, the heart was always in solving problems back in India so I come back in 2014 but these are two big things thinking really big and being innovative two of the things that helped us a lot where we have the ambition of making global impact and we’ve had the ambition of doing something completely new which is in the hotel business. Worldwide there is no hotel chain in the less than a hundred room segment and there are 90%hotel assets worldwide which are less than a hundred rooms. So it’s a big opportunity with somebody should go and solve for.
The second story and this story is very close to my heart which is opportunities are everywhere the question is are you out there to catch hold of them. The first opportunity is building OYO hotels. Before I started OYO, I first started ORAVALS which was more like AIR BNB of India. It didn’t work but a lot of the homeowners had become friends so for three months 100 days, every day three and a half months, every day I stayed in a new home and it was just basically between school and university as you know holiday practically back then, now I can of course in retrospect say learning trip.
But at that point of time, I saw there is this big opportunity for small hotels in which people could franchise and lease and use technology to operate very efficiently. When I saw this opportunity it looked big right because the world’s 90% hotels it’s a huge opportunity that’s when I thought of two things that would have happened:
Either many people had seen this opportunity and tried it and failed because actually this business cannot be successful that’s one option, the second one is that nobody’s tried at all.
As an entrepreneur, you are wired to be an optimist. If there is a 5% chance you will still take it because you know it for me personally I had very little to lose because I felt that if this does not happen at anyway go back to university.
So that got me started so you know this was an opportunity that existed always everybody all of us had seen that there is a good quality affordable hotel chain that’s needed it was just somebody who could have taken that opportunity and gone out and executed. The second thing that I saw opportunities exist everywhere is that eventually after that in 2016 is what I call as the revolution of OYO. I have genuinely believed you know and I’m careful about what I wish for but I love the depression periods I believe when the times are low is when great companies get built.
So 2016, I remember LinkedIn stock was significantly down, capital investments were drying up, you know a lot of wrong things are happening around ourselves. There is a documentary I have watched a lot of times if any of you get time you should definitely watch which is called the men who built America. It shows how America was Civil War driven Europe was the most successful part of the world and then how entrepreneurs like Vanderbilt, Henry Ford etc. Built America into what it is today just because they had an ambition to make a difference. So I felt if you know these guys could build such a great country in the middle of all of the pain and if you see some of the most successful countries have gone through that. Japan has gone through that, China has gone through that , India is of course gone through that. I believe that bad periods is when we should double down on our investments so 2016, we evolved our strategy from saying that instead of just aggregating assets we will do full-scale leasing and franchising of assets.
And the results were amazing. Customer repeats rapidly increased our asset owners continue to fall in love because the yields were higher than ever before. We just told us that full stacks the only way this business will be super successful. That was an opportunity that we saw a lot of entrepreneurs would have said let me do it on the site where as we said if this is what makes our customers and asset owners happy and this is the only thing we will do. So we shut down our aggregating business and earlier last year or mid last year we announced almost the majority of our assets had changed into full assets exclusive franchised or leased assets.
In this process what I have learnt is when you see these opportunities and you see that light in your eyes saying that now I’m going to do this. You know I read somewhere that you know when you’re you know in the shower and you can’t stop thinking about the idea that’s what you should be doing. I think when you have that idea when you see that working at small scale being able to ramp it up and impact it at a very significant number of people is something that’s also very valuable.