Namaste everyone. The first time Rajiv G called me about getting together, he said there will be a few people. It'll be a great evening, and it's a full house. Thank you so much for coming out in such numbers and for giving the love. I hope I will be well worth this evening. Already Rajiv G's put me on a pedestal saying that I hope he'll bring great things on the table. So I'm already thinking what value will I add in a room full of stalwarts in so many businesses. Walking the floors here is very challenging because every corner you find one storied corporate after another which has supported everything from the boardroom to various conference rooms including this room, which is called the singing hall. So let me talk a little bit about, let me start my story from there. I grew up in the southern half of Odisha. How many of you been to Odisha ever? A big group. Thank you. Our state's getting popular. So in Odisha, southern half there is a town called Rayagada. How many of you have heard about this place? Not bad. There's 10%. This has been my big effort in life to make sure my hometown is known by more people. So many years ago it would be 1%, here 10% is already progress. And the little village used to be called Japur because the town had a paper mill which was started by the Singana family back in the day. It just tells you the great impact industry has in people's lives. Often industry is seen as just business, commerce, taxes and maybe jobs, but businesses change lives, and that's true not just in India but around the world. So growing up from there, life was actually very simple because you have very little identification or knowledge about capitalism, business numbers. Knowledge Hindi is fine in between, little bit. Yeah. So for me, my life's dream was at least my parents' dream. Dad used to run a small shop. Mother was a homemaker. Father's dream was that I grow up and work in his shop. Mother's dream was I do everything but be in the shop. As most mothers have, right? Like they have a perspective of you should leave this town and go somewhere else, do something new. And father was also of course okay with it, but he of course wanted to spend more time, and as did I. I enjoyed spending time with him as well. Long story short, my eldest sister, we are four siblings. I'm youngest of the lot. The eldest sister in our many generations became the first woman to get a graduate degree. She got an engineering university degree, and that changed all our next three siblings' lives because she came home and said I got a job. We were not used to anybody getting a job around ourselves, let alone somebody getting a job in an urban city. And one of the days in her university she talked about they had an entrepreneurship fest. That's how I learned the word entrepreneur for the first time. I went to the dictionary, I searched what's an entrepreneur because businessman commonly entrepreneur. I read at least what I remember faintly the definition said somebody who solves a problem and creates a business around it. I was always a contrarian person, rebel. Say in classrooms also when people would ask what do you want to do, I would say I want to be an entrepreneur. The reason I'm explaining this is life is full of serendipity. There is no simple path to entrepreneurship, no simple path to pursuing a business. But whenever opportunity knocks, what you take out of it matters more than anything else. And I tried to take everything I got. Now how did my life change? How did somebody from Bisam Katak, Odisha get to be a technology entrepreneur? My life changed the biggest due to the Thiel Fellowship. How many of you have heard about Peter Thiel? Smaller. How many of you have watched the movie The Social Network? That's bigger, right? That's almost half the audience. So movies, I'm a big fan. At least as a school kid I used to watch all kinds of movies, right? So one of the movies I went to watch was The Social Network, in which I see this person called Peter who gives $100,000 to 20 people under the age of 20. He's a founder of PayPal, early investor in Facebook and various other companies. I looked at him and I thought that... because why would somebody invest in a teenager who's just out of high school? But the most important reason I want to share it is naivety is bliss. Because today I know about capital, IRR implications, hence I am far more conservative, but back then I had no idea and I had the youthful conviction of saying that I can do anything. There was no constraint in life. So next time I went to a cyber cafe, I searched online about the Thiel Fellowship and applied to his program. What attracted me the most about the program were the questions. If you ask somebody young, and if you all ask somebody in your family who's a teenager, who's in their 20s, I'd encourage. One question was: if you had infinite capital, what would you change in the world? Because often as a young teenager or 20-year-old, if you have an ambition you think I don't have capital, but if you remove that constraint, what will you dream? The reason why the dream is very important, and that's been my biggest experience, is the cost of thinking big is cheap. It's free. 50% chance, 100% chance of failure, and similar other questions. There was another question which said: what is the one contrarian thing you believe in that nobody else believes in? I believed in the promise that a company which is built in India with the power of digital and technology can become a global market leader in the world of travel and hospitality. Most people would not. It makes sense. Entrepreneurship is being contrarian. I'm sure there'll be other people doing it. You have to believe in something that others don't when you're starting. So that changed my life. One day I get a call saying that you're among the top 40 candidates and please come to the US. I was the most happy, not because I wanted to become a fellow. Thank you. But I'll tell you this, I was genuinely not excited because Asian resident was not a fellow. But I was excited because both of those were life-changing for me. I landed in the US, for those of you who will relate, I landed in San Francisco on the day of the pride parade. That is as much of a culture shock as you can imagine. Going from South Odisha to Mission District on the day of pride parade. The whole place smells funny. People are wearing all kinds of clothes, and when you have not seen outside of that place anywhere, you think the whole country is like this. So but you know, as we all do, we all learned. I was there for a year. But I wanted to build my business back here in India, and there was a professional reason and a personal reason. Professional reason was I knew more people who I could align with my value system here than I could find there. And the second is my mother was unwilling to move. So both of those made sense for me to come back to India. So 2014 I returned back and set up this business initially called OYO. Our business model was very simple. We provide clean, comfortable room at an economic price at scale in every city. Can we provide a reasonably predictable hotel experience? The first hotel we signed up was in Gurugram in the South City area. It was a 20-room guest house owned by a dear now friend of ours named Rajesh Bhai. We call Rajesh Gupta but we call him Rajesh Bhai. He had a factory in Rajasthan as a side thing of investment. He had a guest house in Gurugram. Only during wedding season it used to get full. Rest of the time was empty. So I pitched him. I told him that I want to provide my brand to you and provide higher revenue growth for you. Rajesh said I was 19 years old. He looked at me and said... but then he also said... he was pragmatic. So he was kind enough to say that I'm happy to give you my property to run but I have only one condition. My condition is brand software but... I said I don't have a place to live. It's a double benefit. I will become somebody who will run the hotel, and it was at that point of time it was a choice, but now when I look back it was the best decision I made. So a 25-room property went from 20% occupancy to 80% in the first 3 months. A lot of you will listen to it and think how. I will give you a quick 60-second context of online business in this. A lot of you would have booked a hotel online. Typically on online websites there are three ways of sorting rankings: sort by price, sort by popularity, and sort by ratings which is quality of the property. So I realized very quickly. So I started by saying that the first room I will sell for the lowest. So I will be at the top of the sort by price online. So two rooms you become popular. So after two rooms I would increase the price by around 30 to 40%. So we get popularity sales, but the highest revenue you get for the quality. So the entire staff of the hotel including myself, whosever name came in the review with a five-star rating got a 150 rupee incentive. So we become eventually the sort by rating, and the online websites became our billboard. So people started talking to each other that if you go to OYO you get a good experience, right price point, da da da, to summer to all the Gurugram companies that hire summer trainees, they started moving to us, and a few months you're full. And in India as they say, in 3 days there's a very popular dialogue which says that... first... as soon as Rajesh's property started getting a lot of taxis driving in and dropping guests, people around started calling me and the call used to be 'yo-yo attach'. People couldn't say OYO, they used to call us yo-yo back then. And then you know, business between 2014 to 2018 we could do no mistake, which is a period you know you heard us sir as well. And I think it was such an incredible honor that it was just a year that I had started the company. My mother used to say... open... and I used to tell her I have a contract that I can't go to university. It's not that I am not capable to go to university. I have just chosen to pursue entrepreneurship. Like you know, one of these times some of us technology founders, some of whom have created multi-billion dollar companies today. I haven't named them, but Bangalore's companies which have sold their businesses for many billion dollars. Sometimes my mother used to see them with me and used to tell her that you've found all the wrong friends beside you. Understandable, right? Her perspective was that everybody around me just has to have at least a graduate degree or a post-graduate degree. That day when the prime minister said on television, so prime minister said on the inauguration of Startup India that when I see Ritesh, I feel like why did a tea seller not start a hotel chain? And he didn't have to say it, but I think listening to that my mother's mind certainly changed. And not just her mind, the minds of millions of other mothers and fathers who typically told their children that startup is too risky and we don't do it. That changed. I was speaking to my friends who run matrimonial business. Now the number one highest ranked probability for a match on matrimonial sites is being an entrepreneur today, which wasn't the case two decades ago at least when I was growing up. My parents told me it job. When I talk to my parents they tell me in their generation government jobs. I think it's rapidly changing with entrepreneurship and starting your own company becoming the most popular thing. 2018, you know we started sort of moving upscale. We launched our brand called Sunday Hotels, which is now becoming very popular, which is our upscale four-five star brand, and we also started going global. These were the two things we started. Just by the time we started both of this, COVID hit. And you know, for those four-five years we used to be celebrated a lot, but conference somebody came and told me that you know, you're seeing all the good times now, you can make no mistake, but there will come a time when you can make no good decision, everything will go wrong, and that will be your test of character. If you see that through, you'll be in a great place, and the biggest thing to do is just stay the situation. Don't run away. I said sure, noted, and then moved on. There were other things. COVID was my first twist with destiny in that format because we were investing or growing our revenue at 3x and business... because the revenue was growing this quickly, we were also investing 2.5 times more every year in the pursuit of that growth. The revenue forget 3.5 times growth got eliminated by 70% overnight, but the cost was already committed 2.5 times expansion. So by these two maths, a company which had cash for around 3.5 years suddenly had cash for 4 months. That was the total balance sheet size at that point of time. And naturally, that's not the time you would imagine new investors picking your telephone calls anyway. Even your old investors would not, but new ones certainly would not. Right in my mind, that was the best, now when I look back, painful but now the best training year for me in my entire corporate career or my entrepreneurial career because I realized who were the closest friends to me. I realized how to run a business when you have no resources purely on the back of your abilities of execution. Your business partners care about you as much as you do because you're in the same boat. And last but not the least, people will help you if you just ask them for it. I just got a message from one of my friends on we have a small group called the India Startup Group, and he messaged, he's here. I can't see him yet. But one of the things that happened is one of the newspapers, global newspaper, without reality announced that OYO has filed for bankruptcy. In the startup group I shared saying, and unfortunately our employees, their families, they're all getting worried because this and that is COVID time, so people think. So it makes sense, travel company going through trouble, and every single person in that startup, roughly 150 people, separate people reached out, shared about it on social media saying this is incorrect. And I think a selective amnesia, the same publication has gone ahead and said it is the most transformative company in the last two years, the most profitable in this sector. But that is their job, right? But the reason I share this is to say that you will all go through, and your families, your children, they'll all see significant challenges. But I have learned that if you just see it through and fight through circumstances, life is always greater on the other side. There were so many companies that shut down during COVID, but every travel company that has survived is printing more cash today than they could ever have. Now my relationship with Rajiv G, I want to talk about that. We'll talk about it more later, but first time I met him when we were just coming out of COVID. Just to remind, FY 2021 and 22, we lost a sum total of 1,000 crores, which is the COVID time I was saying, terrible. Almost 23 was our first positive year, which was 300 crores. That is the time period when I first, around the time period is when we met for the first time. Because people had seen our two or three years of challenges. Most people said he is extremely competent, bright guy, but not sure if he can build a good business. And I was projecting next year almost 800, as entrepreneurs do. I was also projecting, and I'm looking for partners who can support us. We spent I think two hours or so. It was I think probably a combination of Rajiv G, few other friends. Some of you may have heard of Ashish Kachola, who's a famed investor, and a couple of others. They were the first ones who backed me coupled with Kazana coming right out of COVID. And I feel having friends like him and others is probably the most special one, and I don't tell this to him as a shareholder, we are true friends and family rather than that of people who discuss investments. It is extraordinarily valuable because when the chips are down, you want people who don't judge you. And with him, I call him and I only tell bad news. When things are going well, I rarely call him. But when I have a really troublesome decision to make, I'll call him. And I'll give an example of that. I Rajiv G, you're all together. And he was happy. He said, 'Very good. You did your plan and you keep executing.' Then I said, 'If things are going well, we should double down and do more. But I'm in a huge question. But there is an incredible company I have thought of buying. The cost of that company is 5,000 crores and I don't have that cash. I have to go raise this capital but it is going to be very challenging if we don't perform.' So we spent I think 3-4 hours or something like that one of those evenings discussing that, and we went through extraordinary level of detail. Property owners, just for quick context, which is the largest economy hotel brand in the United States, hotels, or majority property owners, running all these hotels, or revenues significantly 30, 40, 50% say by applying a technology. I think beyond all the numbers, eventually he said, 'At the end of the day, the logic you say makes sense, but the big question is twofold. The first, will you put your neck behind it? Because at the end of the day, it is the entrepreneur's belief and execution that will matter. And the second is, be conservative in the leverage you take. Do not ever go beyond the two to two and a half times.' Even though going in the leverage was higher, the leverage was almost four times when we went in. I'm happy to share that now we are at 2.4 turns, which is closer to what you had liked, and that has been the most transformative acquisition we've ever done. I think last year that 300 which became 800 is now over 2.5 thousand because of the continued momentum we've seen. I just want to end by three last things, and then we'll talk informally rather. The first one is the impact of AI in every business around ourselves. I will tell you a few things that I'm doing in my company. I'm sure you all are doing others in yours. The first one is I have become a resident AI teacher. So I run classroom sessions every month for between 100 to 300 people where I train our own talent. So I learn myself of course from everyone around me and then I train our colleagues. The reason why it is essential is that it's rare to find a combination of business context and technological context in one person. If you hire somebody in AI, they will not have the business context as an entrepreneur you have. And if you don't learn AI, you will not be able to explain it to others. So I have figured that as an entrepreneur, if I was living in the like Rajiv you was saying agriculture time moving from cottage industry to industrial revolution, I would have needed to learn machines myself. In the modern generation, the AI foundational models and small models are the machines. If we don't know our machine, how will we run our factory? How will we make the returns from it? For those of you who run factories, you know if you don't know your machine, it's not easy to be able to maintain your production, your quality, your cost and so on. So my first suggestion to you all would be that this is a new technology that nobody really knows too much about. So you have not missed anything. Opportunity. So please do not be worried and please invest 30 minutes an hour every week if not day or bi-weekly to just try and experience first generation technology systems yourself. That's the first suggestion. And I'll give examples of things that AI is doing today in our company. For instance, our ability to ensure deal underwriting, which deals we should sign, lead underwriting, which leads we should be at, being able to ensure that leads, how do we sign them quickly, who do you recruit locally, which consultant you should hire in a remote village in Germany to be able to get your registrations done, how to reach your client, what the client proposal should look like, what the marketing advertisement should look like, is all being done by AI, right? And there is probably a lot more which I'm missing. That's the first suggestion. Second, I think in the world of AI, we have an incredible advantage. Engineers, there are more engineers in India. I was doing the maths, than all other countries combined excluding China. That's the number of engineers we have. So if we can't take advantage of such incredible talent and create value, we will be losing out on massive opportunity. And the last but not the least, please do not consider AI as an unknown animal. We missed the industrial revolution in some way as a country. We won the digital revolution but a part of it through services. In the world of AI revolution, the first effort was the infrastructure. You build the servers, chips, data sets is the Nvidia and equivalent. The second one is the foundational models, which I think it is settled that there are few foundational models have become very big. We have our own Indian foundational model which will do very well. But the big opportunity which is lying, which is our specialty, is the application layer. It is a fully untouched environment. It requires application oriented engineers, and we have more of them than any other country. But for that you have to take a swing at the challenge, and I'd encourage we all do it. Second is India for the world. We run a global business. Out of our over 35,000 crores of bookings a year, over 25,000 would come outside of India. Right, we are the largest vacation rental brand in all of Europe. Whether you go to Saint Tropez or the city of Paris, we are the largest apartment and villa managers in all these cities. We are the largest economy brand in the US, could see the same Motel 6 acquisition. We now run more luxury hotels in Europe than we run in India with our Sunday brand. The reason I say this is we found that we are constantly often afraid of taking a global expansion opportunity. Understandable because of capital allocation risk challenges and so on. But what you'll find especially for technology businesses is outside of India, people are almost waiting for India's style of problem solving, service delivery, and technology which no other country can provide. And one simple way to do it is what our board did with me. Our board gave me 1 crore rupees in 2016 to try and do something in international, and that is what has translated to this 25,000 crores of orders. So my recommendation would be that please give it a go. And last but not the least, this is an occupational hazard, is please try and support young Indian startup founders in whatever manner we can. You're all leading very successful enterprises, and I hope some of you have seen Shark Tank or met entrepreneurs who've been on Shark Tank. These kids, they are just so incredibly smart and motivated and driven. But they need the ability. Like I look at myself, if I knew everything I know from friends around me who were Indian business owners, most of my early capital came from foreign investors. It's only recently that people like Rajiv G and various others have taken a bet on us as domestic capital. I think what they bring far more than capital is context of how to run a business in India. The dos, don'ts, what goes well, what could be painful, and things like those. If you all can find, and most often than not even if you're not providing capital, just give time. That'll be more than enough. You'll find people like I would have gone and spent time with anyone who'd give me time who was running a successful business. So please try and do that. I think it will be greatly beneficial to our country if we truly want to become a global economic superpower. We cannot do it just by... I just came by the way, I'll just end with this. I was in New York just now. New York. The last dinner I had was with a farmer company. He was hosting us for dinner. And the dinner was essentially 30 entrepreneurs from New York essentially saying American... that's such an incredible thought that is how do like they all took time, they all put capital with a very simple goal that how do we support them so that they can become successful. We can certainly do it here, and of course I think a lot of you are already doing it. But my encouragement would be that anything more we can do for our young Indian boys and girls who come from the Odishas, from Uttar Pradesh, who are trying to create their enterprise, if we can support them, I think we will play a big role in the outcome. I'm trying to do my part, but I'm sure you all will. But thank you again. I hope we will have more questions and we'll keep it conversational, and I hope that there will be more entrepreneurs who will say from this discussion they created even larger enterprise. Thank you so much.
