OYO’s One Change Made Billions

Ritesh Agarwal was an entrepreneurial teen in India who loved to travel. So he created a travel search engine.

One obstacle to growth was the subpar customer service provided by the local hotels.

So he tried something novel: he helped hotels improve. He modernized their lightbulbs. Rewarded staff when customers gave high reviews. Etc.

It worked. Hotel owners loved the new, higher occupancy. When Ritesh created a franchise option for them, they signed up.

Today you can see his company’s name – OYO – on hotels all over the world, which led OYO to a multi-billion dollar valuation.

Ritesh Agarwal

Ritesh Agarwal


Ritesh Agarwal is the founder of OYO, the multinational hospitality platform


Full Interview Transcript

Andrew Warner [00:00:00]:

Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they built their businesses. I’m really excited to have today’s guest on because I have been following him in the news, actually, not him specifically. I don’t know jack about him. I know about his company. Oh, yo O-Y-O how this entrepreneur, who to me was largely a mystery, even though I’m studying entrepreneurs. Ritesh Argual has realized that there are all these different hotels that if they could just group together, they would have a bigger footprint. They would be a little bit more enticing for a traveler who wants to go and book a hotel and doesn’t know a no name mom and pop and doesn’t feel comfortable going in there. And he realized, you know what? What if we can somehow aggregate them? And then what if we could also go beyond hotels? And he built this whole thing at a young age, and he built it up. And then, of course, there are all these stories about valuations. It’s this many billions. That many billions. Did it go up? Did it go down? And all that has hit my rate are but what I didn’t get to know is a story of how this guy did it. And so I invited Ritesh on here today to talk about how he did it. And we can go through the bio, thanks to my sponsor, Lemon IO Mixergy, if you’re hiring developers, but I’ll talk about that later. First retest. Good to have you here.

Ritesh Agarwal [00:01:06]:

Great to be here. Andrew, I’ve been, of course, following your podcast for a long time, and you’ve, of course, interviewed entrepreneurs across the ecosystem. My favorite is the one where you interviewed folks from our industry who now have, of course, transformed vacation home and renting an extra room at a house into a I would say multi tens of billions of dollars company, but more importantly, has made a big difference. So, hey, thanks for having me here.

Andrew Warner [00:01:36]:

You bet. You’re talking about Joe and Brian, who did airbnb early days interview here on Mixer.

Ritesh Agarwal [00:01:41]:


Andrew Warner [00:01:43]:

How much of the valuation do you personally pay attention to? Whether it’s this many billions, that many billions do you personally pay attention to see whether you’re a billionaire one day or not?

Ritesh Agarwal [00:01:54]:

Yeah. Andrew, I think I’ll probably use this opportunity to give a little background about myself and where I come from, and that will probably give a little bit of context about how I think about this. So I grew up in the eastern half of India, in a small town, probably in the city. Most people earn less than $100 a year, at least. Around the time where I was growing up, fathers ran a small shop and mom was a homemaker. So, frankly, much more of a usual growing up in India. I’m one of the four kids in the family, so one of the four siblings youngest of the lot. The elder three siblings were Asian. Parents dreams. So, engineering, business school, great job, everything that worked. I was a black sheep, did all right in education, but I was constantly thinking that I wanted to do something else right. I started selling telecom SIM cards while still in my middle school during summers. And one thing led to another. Long story short, I kept doing something or the other, which is different from usual, until I had the opportunity to become a Thel fellow. So Peter Theo is founder of PayPal early investment Facebook. I saw you interviewed Ben. So Ben was, I think, a class ahead of me. So I had the great opportunity to be a thel fellow in the class of 2013, and that changed my life. I went from a little town in India straight to San Francisco and talking about culture shocks, but learned a lot. And the biggest of that was thinking big, didn’t need resources because it’s free. So came back to India, fell in love with this idea of digitizing small and mid sized hotels and homes, and I’ve been doing that for nine and a half years now.

Andrew Warner [00:03:43]:

Before you went through the Teal Fellowship, you had a company was called Orvel Stays, and the name still is part of your business. It is what became Oyo, what was it back then?

Ritesh Agarwal [00:03:55]:

So I started my company pretty much out of a personal pain point or an opportunity, which is whenever I’d make a little stipend, I’d use that to be able to go and stay at one of the nice places next door to Delhi or Quota, where I was for my 11th and 12th grade. And I thought, why not make a platform where people can come reserve these places? That’s what I was doing for some time. At one point of time, I recognized that the world did not need one more booking platform. And there was a lot of value addition for a company which could come in, go deep in the supply, help the hotel. Or the holiday homeowner, upgrade their premises, get into dynamic pricing, manage their content better, distribute on multiple platforms, just a lot more, roll up your sleeves and support your partner kind of a thing, rather than just be a booking platform. And that sort of was a pivot. So initially it was actually called two businesses. It was oravel was the overall website where there were thousands of listings, and one of them was changed into becoming Oravel Ins, but later we changed it into becoming Oyo just to make sure that there was a difference. And Oyo started doing so well that I eventually shut down the Oravel.com business, but the company remained as Oravel Stays Limited, which is what our incorporate company still is, but the brand’s Oo.

Andrew Warner [00:05:16]:

So if I understand you’re right, the very first one was a search engine, kind of like Expedia for local stays, right? And then you said, it’s not enough to be another one of these search engines I need to help the hoteliers who are on the platform. And so you started building software for them. Is that what you did in the beginning?

Ritesh Agarwal [00:05:34]:

Yeah, I think I’ll break this down into two bits. The first is the two learnings that I take away from here is whatever idea you start with may not eventually be the same idea that you build out, because as you work with your customers, you will figure their needs and requirements could evolve. And the second thing that’s an important learning that I had was you should never get to fall in love with one idea until you solve the problem. It doesn’t matter what that eventual idea is. Now, to your question, I think here’s what I did, so let me try and sort of break it down to the brass tax for your listeners for ease. So one of the property owners who was on Orvel, I reached out to him and said that your occupancy is 20%. Can I help your occupancy go up to probably 50 or 60% if if you give me the opportunity to work deeper with you. His name was Mr. Yadav, so he said, sure, I’d love to do it. I was, I think, 18 and a half or so around the time. So he said, I’m doing very badly, so I don’t think that it will get much better than here. And looking at you, definitely doesn’t look like you’ll make any upside. But I’m doing very badly as it is, so might as well give it a go. There are three things I did. The first is dynamic pricing. I didn’t have the wherewithal to really bring data science efforts that we are able to bring in today at a platform level. I did something very simple. The first room used to be priced at $15 and every room sold, the price would increase by $1. The reason is on search websites, travel websites, like booking.com, expedia and so on, you have three main tabs, right? You have sort by price, sort by rating, and sort by popularity. I wanted to begin by being the best in sort by price. And the more reservations I got, I could sell it for a higher price. The elasticity would be higher because we would be more popular. And the third is, of course, quality. I worked with the staff of the hotel to upgrade the ProVisors and get its quality to a minimum level where the ratings could improve so that consumers could say good things about the hotel. As you know, hospitality is a repeat business. So our customers were happy and then we could have them over again. So that’s how the first hotel went from 20% occupancy to almost 80% occupancy. And one hotel owner called his friend and said, well, I made money with oyo. Would you like to do it? And that’s how our business grew. One at a time, and now we.

Andrew Warner [00:08:01]:

Have 170 thousand of them, 170,000 of these types of relationships. The first time that you did dynamic pricing, were you coding it yourself? I know you learned to code at eight. Was that you doing it?

Ritesh Agarwal [00:08:15]:

No. So I think two bits. The first one is, I think the dynamic pricing, like I mentioned to begin with, it was frankly just what’s called as staggered pricing. That is, you started up individual price and keep improving. So there was not so much science in it, to be honest. And I think my effort back in the day, I think my understanding was quite limited to HTML and the very basics of making a database. I think I owe a lot of our engineering efforts to our fantastic colleagues that we’ve had over the years.

Andrew Warner [00:08:48]:

Okay. And then when you said that you helped them improve their quality, can you give me a sense of what you at an early age were able to do to help them bring their quality up without spending too much money?

Ritesh Agarwal [00:08:58]:

Look, I think a good hospitality experience, especially in a segment that we are focused in, require three or four important contexts. Let me actually take it one step behind two important contexts. One is infrastructure, and the second is service. You have to have a good place where everything works, which is a clean linen, clean washroom, clean bedroom, and a nice looking room, ideally, if possible, and things like those. And the other being good service, which means when you check in, it’s easy, it’s simple. If you have any troubles, people help you. If you need some support, like a late checkout, and the hotels available, might as well give it for free, small things like those. So here are the things that I did for both infrastructure and service. On infrastructure, I looked at the hotels which were the top ranked hotels on third party websites, and I saw what their rooms looked like. So one, a lot of hotels had white lights, whereas a lot of hotels which were on the top ranks, they had warm white lights. So I requested our hotel owner to replace the white lights. To warm white lights, which is not so expensive as you can imagine. We put a little runner and cushion, which were colorful, so they brought a little bit of excitement in the room. We put a little portrait, which was, again, I think, a few dollars of cost, and got the cleaning done really good, right? Like really well done, so that you could truly feel like the place is one that you’d like to go stay in on. The service. From the fee I used to make from the hotel, I used to spend probably three or 4% of it as an incentive for the front desk manager for every five star rating they got in order to make sure that they were incentivized, to make sure that they got good customer service and consumers repeated and came back. So I think these are the two things I did for good infrastructure and good service back in the day.

Andrew Warner [00:10:51]:

This is where I get too anal about the details. I understand the difference between white and warm light. I bought white lights thinking, all right, I want white. It’s the cleanest, it’s the best. And it feels so harsh and just annoying. But I can’t imagine anyone going into a hotel review site and saying, I hate that it has white light. Most people don’t notice a difference unless they see it side by side. How do you know stuff like that?

Ritesh Agarwal [00:11:13]:

I think you’d be fascinated. I’ll sort of break it into two parts. The first is the proof of the pudding is in the outcome and the outcome is what percentage of customers repeat with you. So in some of our key markets, almost 65% to 70% of our revenue comes from repeat customers for the last few years. And I think that’s sort of the outcome that we are most focused on. To the bit about will the consumers figure it or not? I think in the photographs you’d be surprised that the travel industry is largely driven by consumers deciding by photographs. Even if you looked at Airbnb, their conversions dramatically rose with them doing proprietary photography of their houses. We’ve sort of gone one level deeper and said that not only will we do the photography ourselves, we’ll spend a lot of effort in making sure that what is the infrastructure that eventually will show up on those photographs? And you’d be surprised how much of a difference it makes to just have warm white versus a tube light in the room when you have photographs. So I think at the end of the day it all goes down to whether you have a good review and rating, which is customers who have stayed and they like it. And the second is, is that a room that a consumer sort of really has a sense of anticipation that they are going to go to that room and feel all right about it.

Andrew Warner [00:12:35]:

What I’m trying to get at is how would you even know to pay attention to that? Because I keep hearing in these interviews, pay attention to what customers want and of course see how they’re reviewing competition and get an understanding of it. I wonder if your attention was brought to that because you paid attention to how Airbnb grew and that was a big part of their story. What does the photo look like? We think that a small photo is good enough, but it turns out consumers think a bigger photo is what really helps them understand the experience. Were you studying that kind of thing and then saying, okay, let me pay attention to details that I wouldn’t have noticed otherwise?

Ritesh Agarwal [00:13:09]:

I think specifically to your question about what inspired me to attend to these details and what I would tell other entrepreneurs to consider is you have to be a customer. You have to be able to put yourself in the shoes of your customer and think, if you were making the same decisions, how would you make it rather than think of yourself as a business owner first? So I spent probably over three months staying every day at a different place before I started OEO. Now, at that point of time, I did not know whether those stays will mean for anything. I was just frankly trying to sign up people to join the Orrival website. But being able to personally stay in these places, make reservations, see the pictures constantly troubled me about saying the place looks so different from I would love it if the photos were there about what this place now looks like. And that sort of inspired me to sort of start looking at what are the five or six or seven things in the pictures that the consumers would really care about. But I think that probably came in me as a customer. I must say that I, of course, over time, have read a lot more about Airbnb and their focus on photography. And that sort of of course, made it an even stronger view in me that we should continue investing in great quality content for our customers.

Andrew Warner [00:14:30]:

You mentioned being a teal fellow helped you see and think bigger. Can you tell me what they do to help you see that way and then going in? How were you looking at the world and coming out? How did that influence what you saw?

Ritesh Agarwal [00:14:47]:

So I think I’m sure you’ve spoken to a few fellows over the years. I think, first off, I must take a minute to explain that it was a big deal for me. It was the first time ever I ever traveled overseas outside of India and I went straight in and met this 40 fellows. So there were 40 applicants who were the finalists and out of which 20 get selected. So I see this 40 kids and frankly, I had 0% chance I’d give to myself to become a fellow when I was one of the finalists. I just went there because I felt it would be a great opportunity to learn from fantastic thel fellows. And it was the first time I could ever travel to the US. I was very excited about that too. So the first time I meet all these thel fellows and I find a sense of there’s so many rebels that are around the world, I used to think that I am probably one of the many. And I’m sure a lot of your listeners will relate to it. Because I’m sure a lot of your listeners are constantly thinking that they want to be entrepreneurs and everybody around them is telling them that you should probably get a job or it starts for you or something like that. I was one of them and I was one more 1819 year old thinking about it that way, and there were 39 others who looked and felt just like me, but from different parts of the world, especially from different parts of the United States. So I was quite fascinated, and I was quite happy to see that I was lucky to become a fellow. I think there were three or four things that really brought this difference of being able to think big. We all used to live in a hacker house right outside of San Francisco in a place called Millbray. Millbray is the only place you get both Bark and caltra, and the rentals are lower. So it worked well for all of us. Now there are probably seven or eight of us in the house, and it was fascinating to me that almost everyone would come in and say that, I want to build the biggest company in this space. Now, none of them had any resources that were remotely close to building those large companies, but each one of them had this genuine sense of conviction and belief that they could build something as big, and some of them did. So that was one thing that really made a difference. The second, I think, just seeing entrepreneurs who were rapidly evolving their companies and aspiring to do big things. For instance, one of our potlucks was with Dylan Field at Figma. He was one of the members of the Potluck. It was a big potluck. I think there were probably 30 of us in it. And he was pitching about how he’s building Figma, which is going to make it easy for developers and designers to access and enjoy the experience and almost imagine that a large part of the room felt like, well, is this going to be real? Is this going to be large? And I think over the years, it’s translated into something that, at least in my company, designers and product managers and operators can’t live without. So just seeing a lot of these in action have helped, I’d say those two. And then probably just seeing so many other entrepreneurs around the TL community also helped. But I think I can’t pinpoint to one thing, but a combination of these, I guess, helped me think big.

Andrew Warner [00:18:14]:

You see people who are making progress, who aren’t just saying, I’m going to create another search engine for this or that, but I’m going to change this industry, be the biggest company in this industry, make progress towards that. And you say, okay, this is real. I can do this too. And so you come out two years I think it was a two year program right when you were there. Yeah, you come out of there and how does your business look at that point when you’re out versus what it looked like in the beginning?

Ritesh Agarwal [00:18:41]:

So Theo Fellowship is a flexible program, so you could actually be in the fellowship and you could pursue entrepreneurship. So I actually was out there in the US. For a few months in 2013, came back to India early 2014. By then, we had one hotel. The first hotel that I had explained you earlier that we were serving. It was doing all right, but it was time to scale. And I think I recognized that there were three or four important things that I needed to fix. And the number one, I have learned that you’re the average of the ten people around you, and it’s crucial that you have fantastic talent and operators building out the business with yourself or the mission with yourself if you want to create long term, successful enterprise around yourself. So I really invest in bringing great talent around me. So, for instance, majority of our senior leaders today have been in the company for around seven to eight years in a company that’s nine years old. Sorry. Just give me that’s. Good. How many dogs do you have?

Andrew Warner [00:19:46]:

Oh, he’s muting. And he’s going, go ahead. You know what? I’ll tell people about the sponsor while you go and tend to your dog. Okay. All right. I should say that my interviews are sponsored by Lemon IO. If you’re looking to hire developers, great developers, at a reasonable price, let the people at Lemon IO make the connection for you and impress you. If you want an even lower price than their other customers, go to Lemon IO Mixergy. I’ve been working with them for a long time. A lot of the people who are listening here have listened and tried them out and then signed up. They will match you like a yenta to make sure you’ve got the perfect match with the right developer, and they’ll stand behind them. Go to lemon IO Mixergy. Give them a couple of seconds here to get back on. There we go.

Ritesh Agarwal [00:20:29]:


Andrew Warner [00:20:29]:

How many dogs do you have? All good.

Ritesh Agarwal [00:20:32]:

I have actually two of them. I have two of them. One was actually one is an Indian Bree, who we adopted from just three streets behind home because we found her abandoned. And I’m so happy. She’s grown to be very big and very shiny over the years, but when she came, it was a stuff, but I’m so happy she’s doing all right.

Andrew Warner [00:21:04]:

Right on. By the way, something you said struck me. You said I came out, and I only had that one hotel. In the two years that you were in the Teal Fellowship, what did you build?

Ritesh Agarwal [00:21:18]:

So I think when I came out, I had not graduated out of the fellowship. This is when I just moved back from the US. To India. I was still a part of the thel Fel Fellowship. So I think my thel fellowship lasted from, if I remember it right, from 2013 to mid of 2015. I think 2014 early is when I moved back to India and started growing the business. So by the time I’d have gotten out of the fellowship, we were probably a company which had little over 100 hotels all across India. We raised, I think, close to $25 million between Lightspeed, which was our first institutional capital provider, sequoia Capital, and Green Oaks Capital, which is a fund based out of us as well.

Andrew Warner [00:22:11]:

Okay. You also mentioned that you were staying at different hotels looking for customers. It seems like that. Was it a three month period where every day you were in a different hotel. Were you looking for customers of your search engine? Or at that point, were you saying, I want to sign these hotels up to be in my network?

Ritesh Agarwal [00:22:26]:

Yeah, these are mostly for signing up the properties. So I used to write old emails to a lot of property owners saying, well, I think that your property can do with more business. I’d like to bring you on arrival. I don’t have the money to travel a lot, but I think I can put you up on this website. Would you mind letting me get a place to crash when I come to see you? I was sort of like an early influencer in that way when I was trying to sort of convince owners to let me list them while letting me stay for a day.

Andrew Warner [00:23:03]:

Wow, that seems like a very hard sell. They don’t seem like they were really into technology. They don’t seem like they would let an outsider come in. Tell me about that sales process. I love the early days.

Ritesh Agarwal [00:23:13]:

The good thing is, especially at times when a lot of homeowners or hotel owners are operating at very low occupancy, people are always curious to discover a lot of hotels and homes. If you have occupancies of 2025 30%, you feel like, well, worst case, anyway, the room was going to go empty. I have somebody staying, but best case, even if I get one reservation, I pay for the one night that I am spending on. So that’s why I think some people said yes, some people did not respond. I’d say a lot of people did not respond, but some people did. And I appreciate and I’m thankful to them.

Andrew Warner [00:23:50]:

So this was a network. Tell me about the evolution from that into more of a formal franchise system. How did you come up with that idea and how did you implement it?

Ritesh Agarwal [00:24:00]:

So I think when we grew from one hotel so going back to, again, 2014, early, when I was just six or seven months into the fellowship, I came back to India. I thought, my heart is in building this business to become bigger. When other owners started reaching out to us, I realized that I sort of got stuck when we had two or three hotels, because every time I try and get the fourth hotel or try and discuss with the fourth hotel owner, something would break in the first, 2nd, or the third hotel. Right. Something on customer side, something on the merchant side, and so on. So I realized that the number one thing I need to do is bring great talent. So I of course had Anuj with me. So I and Anuj distributed our jobs and we said you will do the supply side. That is your job is to bring the franchisees. And I said my job is the demand side that I will do the distribution, revenue management and more efforts in that direction. I sort of spent a lot of time after that, sort of working with the team. And later, we brought other colleagues, our CEO joined and a few others where they basically designed in what we call as a playbook of what does it take to make sure that any individual hotel owner with a certain set of criteria can come on our network, can get our service quality or get their service quality improved and can grow the revenue. When they join us, which we sort of broke down into who are we going to select? What is the process from the first meeting to the second and second meeting to the third meeting, which is assigning what happens between signing and the property, becoming a part of our network and getting our brand? What happens in the first 30 days, 2nd 30 days and the third 30 days, which we call as a P 90 X, sort of being able to really deep dive to those level of details is what I think I credit anush to do. I just was lucky to bring great talent and leaders over the years who then built such a fantastic franchise behind them.

Andrew Warner [00:26:03]:

I want to spend a little more time just on that realization, the transition. I remember when I talked to Paul Graham, I said how as an interviewer, do you think I should be leading the conversation? He said forget what’s in the news, because that will make headlines. But it could go away. He said pay attention to the past. And I remember the thing that he told me to pay attention to was how did Google realize that what they should do was own their own servers instead of and build their own servers. Those decisions are really tough to come by. So would you mind spending a little more time telling me about how you came up with that franchise system? I see the evolution and how you implemented it, but where did those wonderful ideas come from?

Ritesh Agarwal [00:26:46]:

That’s a tough one. But I’ll attempt in trying to reflect because the same way as you mentioned that Paul Graham mentioned that let’s not and he is of course an inspiration to every entrepreneur, I dare say. I also believe that experiences are less valuable than the reflections of those experiences. So I will also selfishly try and reflect on my experience to see if there is more to think about it. When I look back, I think the first and foremost is I try to spend as much time as possible. With as different a variety of people as I can, and that sort of shapes my own worldviews and my own sets of convictions, right or wrong, agree or disagree, but at least I have a view or a conviction on a certain perspective. So one of the convictions that I’ve always had is organized businesses or organized platforms such as the one that we were trying to build at Oyo, are always more successful when they can partner with unorganized businesses rather than compete with them. At least that’s the worldview I have had. A lot of the individual hotels are unorganized. It’s not like we were the first people trying to make a difference in the budget hotel or the budget holiday home market around the world, or the mid market hotel or holiday home market in India or around the world. There were a lot of companies, but some companies just tried to do it completely. First party where they tried to own the land, build the building, run the building and create value around. And my worldview was that small businesses, unorganized operators, entrepreneurs themselves will always beat organized businesses at their job, especially when they’re focused in the middle market or in the economy segment. So it was clear to me that as I grew the business and took advantage of these technology efficiencies, the best way of doing it was to partner these individual hotels. And the second was the power of technology was unparalleled. I felt like, on one side, getting access to technology and branding, and on the other hand, getting access to these entrepreneurs who are willing to partner and say that together we’re going to be very successful, could have made a huge difference. One of my favorite documentaries is The Men Who Built America. And just seeing how the fantastic entrepreneurs there, including, of course, Mr. Vanderbilt, who partnered so many business operators and built successful enterprise by making them more efficient and more modernized and more scalable. I don’t think that that is what I was thinking, but that’s also been a part of my worldview for a while.

Andrew Warner [00:29:46]:

I think that’s interesting, you’re saying that smaller independent operators will beat out the big guys. Because.

Ritesh Agarwal [00:29:56]:

I think okay, that’s the question. I thought that was a statement, but anyway, I’ll try and take it as a question.

Andrew Warner [00:30:02]:

Yeah, I am. Why do you think yeah, I think.

Ritesh Agarwal [00:30:06]:

The easiest way to think about it is as soon as you think about it as small guys versus big guys, I think it looks a little harder. But if I were to turn it around and say entrepreneurs who bring up their families and it’s their only way of earning will beat general managers for whom it’s a job, I think it sort of becomes very easy to imagine why. So these are entrepreneurs for whom it is their only source of livelihood. And for them, this is hence something that they’ll constantly be creative about. They’d constantly be thinking, what can I do more to be able to make sure that if repeat business gives me more ADRs, I’m going to get to it and build a more valuable outcome? So I think that’s sort of the thinking I’ve always had, that entrepreneurs, especially in small scale, will always beat out just professional systems, especially in a business like hospitality, which is you can’t just break like the number of touch points are so huge, right? This check in, pre check in, room to bedroom, in bedroom experience, washroom experience, breakfast. Like there’s so many moving parts that having someone who truly cares about every bit of it and attention to detail, like you mentioned, makes a huge difference.

Andrew Warner [00:31:26]:

I used to think about that a lot because I grew up with a dad who at one point owned a few local sneaker and clothing stores. And I would see, we worked hard. We spent time with every single customer. We made sure that they got what they needed. And if we didn’t have it, we would find a way to go buy it from another store and then bring it in so that we could have it for the next person who asked for it. I mean, literally, we’d buy it from another store in a different town and have it in for the next person who wanted these Nike sneakers. And still, I remember seeing the bigger guys would crush us because they had this beautiful experience, because they understood branding and we couldn’t even touch that. And I guess what you’re saying is keep all that personal touch, add the branding that they can’t access, we’re going to combine it. So then I think are there other businesses as you look around and say this would work there? Because I’m thinking local Laundromats, they care a lot about the details, but I don’t think that would work well, they don’t need the technology, they don’t need the search engine. They just need proximity. What other businesses, as you look around, would you see that applying to?

Ritesh Agarwal [00:32:29]:

Yes. First off, I think what a fascinating story you mentioned. You’re absolutely right. Right. I’ll tell you a lot of our hotel partners, so today we have just in the United States, over 320 hotels. So if you’re especially in the south of us and various other parts, it’s impossible to miss an oi hotel. Of course. We have one in downtown Times Square. In New York? We have a bunch in Florida, in the Pacific Northwest and so on. But I’ll tell you this, we have a hotel owner in someone like Mark Love, who’s got eight hotels with him. We have a hotel owner in Mr. Raj Patel, who’s got six in them. And a lot of, like, they’re not people who are individually running the hotels. Only their entire families are engaged in it, their children, their friends, their families, which is what you mentioned around yourself. And that’s exactly what we do. We bring the beautiful branding, marketing technology and allow the personal touch to sort of do its magic on top of it.

Andrew Warner [00:33:31]:

Do you think that would work in restaurants?

Ritesh Agarwal [00:33:34]:

I do think that it will work in other businesses. Now, which businesses it would work in is a tough question. I think services businesses. I do think that almost a lot of services businesses will work a lot better than it would work in, let’s say, like just goods businesses or you’re selling something. Because when you manufacture there, there’s a lot of scale benefits that come along. But if you provide service, think about anything. Maybe restaurant is one, banquet, which is events is another, because finding places to do events is hard. But a technology and a brand could allow you to get access to them. But it could still be fulfilled by somebody who’s more personal touch. Surely it would be great support in health services, I’d imagine, because that’s, again, an area where deep personal engagement makes a huge amount of difference to people. Lifestyle, I think a lot of lifestyle activities. Of course, fitness is a big one. There’s more I think I can go on. But I am very happy with accommodation, and that’s what I’m intending to do. But if there are other entrepreneurs out there who want to pick up any of these segments and build a successful business, I’ll be very inspired. So please keep at it. But I have just so much to do here in our business itself.

Andrew Warner [00:34:53]:

No, I like that kind of thinking, because as I look around now, I do start to think, well, what other services businesses can I then connect up and do it this way? I heard Masayoshi Sun, the founder of SoftBank, was at your wedding, along with Prime Minister Modi. I’m fascinated by them. I was wondering specifically with SoftBank, how did that funding come together? Was there any interesting story you could share with us?

Ritesh Agarwal [00:35:23]:

So I always believe, first off, I’m just very thankful for what’s happening in India right now. Right. Like, I think India is truly at a unique place today, and I’m sure your listeners would be interested to hear about. I’m sure India is coming up more and more in conversations in the last three years versus earlier. It’s an opportune time as well. I think. In the last ten to 15 years, young Indians have gotten access to information around the world due to the courtsey, Internet. Our culture and value systems are very similar in the form that India is probably not one of the largest English speaking population in the world. People are well educated. They have a democratic system where we go through state elections, national elections, city elections, much like a lot of other large democracies. So I think in a lot of context, we are similar to a lot of countries around the world who went through this part where at some point of time, there was a sense of pursuit for excellence. And I think here in India, young people today, I’ll tell you, one of our call center employees, I was speaking to him a few years ago, and I asked him, what’s your ambition as you grow ahead in your career? And he said, I want to build a company just a little bit bigger than OOH. So I think the ambitions today are just absolutely world class, which is an incredible time to be here and an incredible time to be building a business in India at this point of time. And I’m excited about it. The fundraising from all our investors are very exciting stories with SoftBank. I think we got introduced to SoftBank from one of our previous investors from Green Oaks, Neil Meta. So he introduced us to them. We just raised a round of capital, so we did not need new capital. But we met the CEO of SoftBank at the time, and he mentioned, of course, about what they were doing. I was, of course, fascinated about SoftBank because, as you know, they were one of the earliest investors in Alibaba and had built such an incredible success around it. So I was, of course, fascinated and inspired by that. So as and when we wanted to raise our next round of capital, we got in touch and he said, we’d like to consider investing in your company, but before that, you should go meet Sunsan, who’s the chairperson of SoftBank. So I said, I’d do it regardless of you investing if an opportunity existed. So I went to Tokyo. I remember it well. This was one of the annual general meetings that they were hosting, so he was kind enough to make time that day. Between his presentations, he took out probably 20 or 30 minutes of time. It was me and Abenav’s RCO. Both of us had gone to see him. And remember, we always live in a budget. But that point of time, we’re in super budget. So we were staying in a hotel which was far away. It was a little room. We shared rooms, naturally, because that point of time, we didn’t think of spending for two different rooms. We are traveling, of course, individually, but we’re really looking forward to that meeting. So we give a quick update about our business to SunSun. And I think he said two or three things, which I think I look back and I feel made a huge difference. The first was building competency upfront is more valuable than delaying it, which means that making sure that you can invest in your direct distribution. We are today one of the world’s most downloaded travel apps. Among the top five, being able to build a competency of, like we discussed, dynamic pricing, being able to build the competency of the science behind what does it take from an owner applying to join you to the time going live. So that’s one. The second thing he mentioned was just the amount of impact or the amount of value of repeat customers is unparalleled. So constantly track that like a hawk. And the third thing you mentioned is you’re a network driven business, which means that there’s a lot of network effects. So making sure that your network is made available or you plant your flags in all the key cities in India will make a huge difference. At that point of time, I think I end up in our, of course, just taking notes, and we felt it was it was a fantastic conversation just to call out. At that time, 80% of our revenue was new. Today, 70%. 65% to 70% of our revenues repeat. The second is, at that point of time, we did not have a mobile app or we just launched, probably we are today one of the world’s most downloaded travel apps. And at that point of time, we were just in three cities. And today, just in India, we’d be serving a few hundred cities, and then there’s more around the world. So I think a lot of those turned out all right. But at that point of time, I think we wouldn’t have appreciated what it meant. So, of course, I’m very thankful for the partnership we’ve had with all our partners, whether it is Lightspeed, Green Oaks, but also, of course, very thankful to SoftBank Vision Fund and the teams.

Andrew Warner [00:40:54]:

Over the years, I remember asking Sam Altman about his personal habits, and I didn’t spend enough time on that. And I regret that because I think I spent too much time on the business and not enough on how he built it mentally, how he mentally got to the place where he can build it. He told me that he would set goals for himself annually and so on. Do you have any habits like that that allow you to build, that allow you to be a good leader?

Ritesh Agarwal [00:41:20]:

That’s a great question, by the way, and I’d love to sort of listen into your podcast, which have these questions, because there’s a very interesting question that I learn a lot from whenever I try to read books. One of the recent ones that I read was no rules. Rules. And I think I try to sort of gather whatever I can, what I can do better individually. And I think that’s the number one habit. The number one habit is to be paranoid about how to be a better version of yourself. And I try to learn as much as possible around myself, how I do it. One, I try to reach out to as many people as I can around myself, who I believe are very good in their fields. And it could be absolutely everything. You could be great in hospitality, great in technology, great in content creation, great in service, great in real estate, great in social media. No matter what, I try to reach out to as many people. And back in the day, I think it was very hard to get responses. Now the percentage of responses is, of course, increased, and I’m very thankful for that quite well. The second thing I try to do is I’m constantly trying to sort of keep track of world events. And whenever they are world events, instead of just reading them as one note on the wall, I try to ask myself, what’s there in it for us to learn, for us to do, for us to make a difference? Of course, before we get to doing something, I spend a lot of time thinking and taking feedback from my colleagues, from our partners, from our shareholders board and so on. But at least just making sure that I try and gather as much information as possible is something I try and do every day. I set a goal for myself, which is, what is success for me today? I’m so happy you asked that question before we started today’s podcast. I think it matters a lot. Like asking yourself, what’s success for me today? Like, when I go back to bed today, do I feel satisfied or not? Will depend on whether I did my job well. And I try to keep a high bar or increase my bar for myself.

Andrew Warner [00:43:26]:

If it’s one thing you will write down, what’s one thing that will make today a successful day for me?

Ritesh Agarwal [00:43:32]:

Absolutely. Every day.

Andrew Warner [00:43:33]:

Can you give me examples?

Ritesh Agarwal [00:43:34]:

Yeah. So I think just this morning I spent a full day planning our network for the upcoming season in India. The travel season is actually the November and December and January, which is sort of the winter season. In India, the temperature is a little bit like fall or spring. So people sort of really like going out and so on. In most parts of India, some parts can be quite cold. So for me, it was I want to lock down our seasonality plan for India in terms of what kind of network I need to be able to have. I try to sort of keep it at five to six because one’s too less. So I also wanted to make sure that I locked into our Denmark plans for some of the key locations that we’re investing in, like born home islands and a few others. I wanted to make sure I looked at our product releases that are coming. So there are five of those things at least. I try to make sure that I’m successful in every day, and that just makes sure that I’m able to make a positive difference. A lot of time, people who work in offices and I always see this, there are two options. Either you can execute on what others agenda is, or you can have your own agenda. I think having your own agenda and your own definition of what makes you successful is very crucial. Because if you don’t do it, you can just spend the entire day. You can feel like you’re very busy and probably the outcome of it may not be so much to show. So I really feel like having goals makes a huge difference whether it is daily, monthly, yearly. This is an outcome.

Andrew Warner [00:45:14]:

But you’ll start out your day and say, here’s the one thing that will give me the most meaning at the end of the day when I go to sleep, and here are the other four or five things that I’m going to get done today. It’s a no matter what, I’ve got to get it done.

Ritesh Agarwal [00:45:24]:

Absolutely. And the first one which will give me the most satisfaction has to be the first thing you do, because if you do anything beyond that to begin with, it never gets that priority, the clean mind space, the problem solving capability that you want to invest in it. So, yeah, you got to prioritize it, not just in the difference, but also in just sequencing as well.

Andrew Warner [00:45:46]:

And then when you read books, how are you pulling out information and holding on to it and not just having it be another form of entertainment in your life?

Ritesh Agarwal [00:45:55]:

I think that’s a great question and like I mentioned earlier, great experience is worthwhile, but what’s worth more is the ability to sort of reflect on those experiences. So I spent a lot of time trying to make sure that whether it is books, whether it is documentaries, whether it is publications, I try to sort of reflect on them and sort of ask myself when I’m making notes for my morning or before the end of the day about what are important takeaways or things that I should do in my job in our company to be able to reflect similarly. I’ll give you another example of that. Andrew and I think this is something we do, and I think that most companies with teams greater than probably 30, 40, 50 should probably consider doing. We do what we call as a reflection session once every few months. The reflection session is nothing but a cathartic discussion where every individual has to say, what did we do wrong? What we should not have done, what did you do wrong? And it is mostly expected to be pointed at me. And I expect my colleagues to start with like the colleagues who have been with me for eight, nine years from the time where I started the company. So they are probably they feel the most comfortable sort of being cathartic to me. And I think the power of that is unparalleled. A lot of people may feel like it’s just a lot of negative energy, but if you do it right, it can be a lot of positive energy. People just feel like they feel like they can get everything off their chest and now they can just roll up their sleeves and get back to action again.

Andrew Warner [00:47:30]:

How often are people just and all they’re doing is telling you, here are the things retest that you should be doing differently that you didn’t do right.

Ritesh Agarwal [00:47:37]:

I think they’re saying that here are the things that the company could have done better, and here are the things you could have done better. So it’s both I see in that context, yes.

Andrew Warner [00:47:50]:

And it’s just that we’re not softening it by saying, hey, you wear a shirt well, you did good yesterday in a meeting. No, it’s just not allowing your head vigorously not allowed. Only the things that you could have done different. What’s one example of something that someone gave you that might have been harsh but made you better? How did you become better from this process?

Ritesh Agarwal [00:48:10]:

There’s so many of them. I don’t know how many of them I can speak about in the podcast. I’ll try. So I’ll tell you. One of them one of them was one of my colleagues told it’s become and this is, I think, four years back, but has stayed with me. One of my colleagues told it’s become hard to be in a meeting room with you because it’s hard to speak because you don’t give enough time to your colleagues to speak. And you start speaking in the middle. We understand you’re passionate, but that doesn’t help my ability to share my perspective. And I said, well, so I write all these I don’t speak in the middle until all my colleagues have spoken. And at the end, I sort of go line by line and say what I’m going to do to be better. And one of the things I mentioned is, next time on, I will not only wait for people to speak, but at the end of the call, go around the room and ask everyone to share their views if they were not able to. So I think that’s an example, but there’s probably many more. Some I can speak here, some I got.

Andrew Warner [00:49:19]:

That’s a killer example. All right, I get it. What about what you were saying about calling people up and learning from them? I remember I forget who it was. Jay Abraham. When I was a kid, he had this CD that I found somewhere where he said that he would make a phone call to an entrepreneur and say, I want to learn from you and I’ll teach you about my business, and let’s just talk it through. And that seemed like a dream to me, but a weird thing to do. Now I have a podcast. I get to do it. How do you do it? How do you get somebody on the phone? And what’s your process for learning from them?

Ritesh Agarwal [00:49:48]:

Yeah, look, I think, first off, I think you have a fantastic growth that you get to speak to the best entrepreneurs in the world. I’m semi envious, but I also know that this is a lot of work, so congratulations. And in building what you built, I think there are a few things that I try and sort of make sure. The first is I think preparation is highly underappreciated. Making sure that you prepare well is a very key part of absolutely everything one does. So whether it is learning from others, whether it is going to a meeting that you have, whether you have to go make a sales pitch, whether you’re going to interview someone, always invest the time in preparation. It will never go. It will always be worth it. I think specific to what I do when I try to reach out to people to learn from them. I do my homework. I try to read about them. I try to sort of ask around about what are the things that they were very good at, what are the things that they did? And I ask myself about what are the things that I will benefit from learning from somebody in this space? And then I sort of try and spend a lot of time just listening. So my ratio is if I’m there in a meeting where I don’t have to speak or present, I should listen 70% of the time or 80% of the time, and I should just make an environment to do that, which is what you’re doing very successfully, of course, for so many years.

Andrew Warner [00:51:21]:

David Rubenstein, the founder of the Carlyle Group, he’s now doing a series of interviews that happen to be on Bloomberg. I asked him why. He told me this is the thing he loves to do, like the way that some people would play golf in their retirement. He just wants to learn. And anyways, phenomenal interviewer. The reason I bring that up is if you wanted to do a set of interviews, the kinds of conversations you’re having, and do it without having to spend a lot of work on the tech. But do spend some. Time prepping for them. I could set your team up. And I know you’ve got a great team. And I’ll make sure that you just sit and you learn. And then, more importantly, the rest of us get to tune in and learn from how you’re understanding and what you’re picking up from them.

Ritesh Agarwal [00:51:58]:

That’s motivation for me. Andrew, do it. So if I end up doing it, hat tip to you. All right.

Andrew Warner [00:52:05]:

I tried to find coming back to Oyo, I tried to find a list of the things that were that were significant milestones that were turning events. In closing this out, would you pick one or two that actually, I had another question after this, but would you pick one or two of these milestones? It seems the app was a big one. Going internationally was a big one. Coming to the US. You own a big you own not franchise, but you own a big hotel in Vegas. What’s one or two of these things that was a big turning point that allowed you to grow?

Ritesh Agarwal [00:52:40]:

I’d sort of break it into two parts. The first is just a quick clarification. A lot of people think that we own the hotel in Las Vegas. We own a small stake in it. It’s largely owned by a third party fund. I know a lot of coverage said that we had it, but I wanted to use this opportunity to just clarify that. But yeah, we do have a great hotel in Vegas, so if you’re there, check us out next time. But the more important question that you mentioned, which is milestones of the journey, I’d say let me try. And I typically like the three options. That is, which are the three, but I’ll probably use five in this one. The first is being able to transform from Oravel to Oo and saying that whatever our customers want, we will build for them. And if they want a full stack brand which improves their revenue, we’ll do that. The second, the Theater Fellowship, because it gave me the opportunity to get exposed to the world that I didn’t have a lot of opportunity to think or feel about. The third, being able to bring great talent. I think they have made a huge difference in where we are today. I think great talent makes incredible difference in the long term. And especially great talent who sticks along for a very long time. I think the fourth is being able to sort of grow global and be an enterprise that goes around the world. I think the fifth one, something that was a very crucial milestone, is COVID. I think COVID was a very tough time for the travel businesses, but I believe that tough times are also times when a strong character is built. And I think we used COVID to sort of transform our business, reset ourselves to be a company that we are today. And I think I feel very good being here today. And I don’t think that’s the case just for us. I think that’s the case for most travel companies. I’m sure like Airbnb had a fantastic reinvention after COVID and so many other companies have used COVID, which were actually challenging times, but as an opportunity around themselves.

Andrew Warner [00:54:50]:

All right, the final question is this a lot of people are listening because they are wondering how did you do it? Meaning like, you didn’t just build a multimillion dollar company, you built a multibillion dollar company. It would be too simplistic to say what’s the one thing that allowed you to do that? But if there is one of many things that you can highlight that the younger you who had just come to America and maybe was listening to this podcast, maybe there is a younger version of you listening to this podcast. If they could take one thing away and say, here’s why he went to billions and not just millions or thousands, what would one of those answers be?

Ritesh Agarwal [00:55:27]:

I’d say two words hard work and perseverance. There is always light at the end of the tunnel, but you got to keep digging a lot of time people. Stop digging too early. So I think perseverance is a highly underappreciated rate. There’s a lot of time you’ll feel like, I can’t see the end of it. You’ll be surprised how close the end of it is. All you got to do is keep digging.

Andrew Warner [00:55:51]:

The digging is a reference, I guess, to the Napoleon Hill story of the person who bought an oil well or something and dug a little bit, didn’t find it, he sold it and the next person got it. Or is this just a generic story? And that’s your point?

Ritesh Agarwal [00:56:03]:

Yeah, I think, yes, it’s partly to do with the oil well story, but partly to do with the mountain digging, where people sort of build tunnels, so especially tunnels are very dark. Right. If you keep digging, at some point of time you’re going to see a lot of sunshine. But it’s very easy to be heartbroken and think, like, there’s no sunshine at the end of it.

Andrew Warner [00:56:28]:

Speaking of, I’m doing this at a comfortable 11:30 A.m. Right now in Austin, Texas. What time is it where you are?

Ritesh Agarwal [00:56:34]:

It’s 10:00 p.m..

Andrew Warner [00:56:35]:

Thanks for working this late with me and thank you all for listening. If you need a developer, remember, go to Lemon Dot IO Mixergy.

Who should we feature on Mixergy? Let us know who you think would make a great interviewee.