RITESSH AGARWAL FOUNER & CEO PRISM PARENT CO OF OYO PHDCCI 15.05.206

Namaste, everyone. The first time Rajiv ji called me about getting together, he said there will be a few people. It will 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 ji has 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 room including this room, which is called the Singhania Hall. Yeah. Ragupati Singhania 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? Oh, 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 J.K. Pur because the town had a paper mill, which was started by the Singhania family back in the day. It just tells you the great impact industry has in people's lives. Often industry is seen as, you know, 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. But come knowledge with the NC circle. Hindi is fine in between little bit. Yeah. So, for me my life's dream was, at least my parents' dream was, dad used to have a small shop. Mother was a homemaker. Father's dream was that I grew 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 to 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 am youngest of the lot. The eldest sister in our many generations became the first woman to get a graduate degree. She got an engineering, you know, university degree. And that changed all our next three siblings' life. Because she came home and said, 'I got a job.' We were not used to like anybody getting a job around ourselves. Let alone somebody getting a job in an urban city. And in 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 business person to businessman look at commonly. The 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. You have to just look at what you have to do. So that's it. In classrooms also 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 do 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 Bismark at Odisha get to be a technology entrepreneur? My life changed the biggest due to the Thiel Fellowship. How many of you heard about Peter Thiel? Smaller. How many of you watched the movie The Social Network? That's bigger, right? Like that's almost half the audience. So movies I'm a big fan of. School kids 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 Thiel 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 I want to be an entrepreneur. Because why would somebody invest in a teenager who's just out of high school? Naivety. But the most important reason I want to share it is naivety is bliss. Because today I know about capital, IRR, implications. Hence, I'm 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. What is the one thing you believe in that nobody else believes in? What is the one thing you... You all ask somebody in your family who's a teenager, who's in their 20s. One question was, if you had infinite capital, what would you change in the world? Because often as a young teenager or a 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. I got so shaky. To connect the 50% chance. I got so shaky need to 100% chance of failure to be trying to connect. 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 make sense. Entrepreneurship is being contrarian. If you believe in what everyone else believes in, then 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 happiest, not because I wanted to become a fellow. Thank you, but I'll tell you this, I was genuinely not excited because before me no Asian resident was a fellow. But I was excited because in my family for the first time in many generations someone was going to the US and I was going to sit in a flight. Both of those were life-changing for me. I landed to 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've 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 learn. I 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 as OYO. Our business model is very simple. We provide clean, comfortable room at an economic price at scale in every city. Can we... We a reasonably predictable hotel experience. The first hotel we signed up was in Gurgaon the South City area. It was a 20 room guest house owned by a dear now friend of ours named Rajesh by Rajesh Gupta but we call him Rajesh by. He had a factory in Rajasthan as a side thing of investment he had a guest house in Gurgaon. 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 he said I was 19 years old he looked at me and said up to take a look at any of our property about that I said revenue but I got it. But then he also said I would get in the situation of sitting in the garden. So 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 I'll brand be easy. Software be easy. But tell I am the only way to do it but I have no idea what I can say what you need to know. So 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 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 website 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 that you have to be in the middle of the top of the line. 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. The most other online big time is 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 whoseoever 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 website became our billboard. So, people started talking to each other that if you go to OYO you get a good experience right price point. The summer cos I made that all the Gurgaon companies that hire summer trainees they started moving to us and a few months you're full. And in India as they say in three years there's a very popular dialogue which says that I'm feeling good I am the one I need to get that. But those first I got it. The whole thing could be what do you think? So, as soon as Rajesh G's property started getting a lot of taxis driving in and dropping guests people around started calling me. And the call used to be how maybe a Yoyo gets that attached to that. The people couldn't say OYO so they used to call us Yoyo back then. And then you know, fit a business until I got karma until I got between 2014 to 2018 we could do no mistake which is the period that you know, you heard us sir as well Mr. Mehta and I think it was such an incredible honor that I had it was just a year that I had started the company. My mother used to say to me go to the same way I put it there. To make it new say open degree karate. 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 won't name 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, you know, everybody around me just has to have at least a graduate degree or a post-graduate. 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 a 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 are 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 I see in my conference somebody came and told me that Ritesh, 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.' Man I don't know. Man may note here 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 three and a... Because the revenue was growing this quickly, we were also investing two and a half times more every year in the pursuit of that growth. The revenue, forget three and a half times growth, got eliminated by 70% overnight. But the cost was already committed, two and a half times expansion. So, by these two maths, a company which had cash for around three and a half years suddenly had cash for four 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. In my mind, that was the best... Now, when I was telling it was the most 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 on 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 that happened is one of the newspapers, global newspaper without reality announced that Oyo has filed for bankruptcy. Right? What's the meaning of startup group? I shared saying key you news fell out. And unfortunately our employees, their families, they're all getting worried because and that is COVID time. So people think it should make sense travel company went 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 I can do make it selective amnesia. The same publication has gone ahead and said it is the prism of the most transformative company in the last 2 years, the most profitable in the sector. But will take it that is their job, right? Like the most killer that I will skip out of it and I will take out of it and I will take out of it. 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 ji, 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 2022 we lost a sum total of 1,000 crores. Which is the COVID time I was saying. Terrible. 23 was our first positive year. Which was 300 crores EBITDA came in. That is the time period when I first around the time period is when we met for the first time. With some of you because people had seen our two or three years of challenges, most people said Ritesh is extremely competent, bright guy, but not sure if he can build a good business. And I was projecting next year almost 800 crores EBITDA. As entrepreneurs do, I was also projecting. I'm looking for partners who can support us. We spent I think two hours or so. I think probably a combination of Rajiv, few other friends, some of you may have heard of Ashish Kacholia who was a famed investor, A.J. and a couple of others. They were the first ones who backed me coupled with Khazana. 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 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 we were all together. So 300 crores to 800 crores that year. 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 ki hamari EBITDA 800 crore ki hai. 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 you 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. Kis pro- kitna aaj ke din mein profit hai? Kitna badhaenge? Technology kaise invest karenge? Renovations kya hongi properties mein? Property owners kaun hai? Just for quick context, the company ka naam Motel 6 hai, which is the largest economy hotel brand in the United States. Lagbhag unke 2,000 hotels in US mein. Aur majority property owners hamare Indian Gujarati bhai hai. Jo Bharat se US gaye hai and they're running all these hotels. Aur hamara thesis tha ki hum usse woh flat ho gayi thi business kai saalon se. Hamara context tha ki hum uski profits ko aur revenues ko significantly badha payenge 30, 40, 50% se by applying our technology. I think beyond all the numbers, eventually he said is, 'Ritesh, 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 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 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 times, 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 and 1/2 thousand because of the continued momentum we've seen. I just want to end by three last things and then we'll talk informally for that. 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 was saying agriculture time moving from cottage industry to industrial revolution, I would have need to learn machines myself. In the modern generation the AI foundational models and small models are the machines. If you don't know our machine, how will we run our factory? How will we make the returns from it? For those of you 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 are not missed anything. Just in Shuru Karengi was in the opportunity bought. So, please do not be worried and please invest 30 minutes hour every week if not day or by bi-weekly. To just try and experience, you know, first generation technology systems yourself. That's a 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 is what leads we should get, being able to ensure that we leads can 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 sort of 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. And there's probably a lot more which I'm missing. That's a first suggestion. Second, I think in the world of AI, we have an incredible advantage. There is more engineers in India I was doing the maths than all other countries combined ex-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. The reason I say all of this is because 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, which is the Nvidia and equivalent. The second one is the foundational models, which I think it is settled that there are few foundational models that 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 you 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, the city of Paris, we are the largest apartment and villa managers in all of these cities. We are the largest economy brand in 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 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 crore 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 you 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 do's, don'ts, what goes well, what could be painful and things like those. If you all can find, and you know, 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'll be greatly beneficial to our country if we truly want to become a global economic superpower. We cannot do it just by us. I just came, by the way, I'll just end with this. I was in New York just now. I New York office I have a meeting. The last dinner I had was with, you know, actually a pharma company. I have my MNL Pharma at Chintu Bhai. So, he was hosting us for dinner. And the dinner was essentially 30 entrepreneurs from New York. Essentially saying how Indian-American budget to US may have only get some other way. That's such an incredible thought. That is how do like they all took time. They all put capital with a simple goal. That Bharatiya logo US may arrive 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 is 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 you know there'll be more entrepreneurs who will say from this discussion they created even large enterprise. Thank you. Thank you so much.

So when did I realize that the magic is working? It's a tough one. Because I don't think there was ever like... I genuinely I will tell you there's always this imposter syndrome. I don't know how many of you... Let me try that one. This is better. This is working. There's an imposter syndrome, right? Like I always feel that like if you ask my friends from the town I grew up in that you think that Ritesh will be so successful as people perceive or a lot of time when people introduce me...

They explain a lot about me, and then they invite me and I have to remember that that is me they are calling, not someone else. So it was so far away from my imagination that even today I feel that it is a good thing. Mother and I have some more to do and we will do it together. That is how I think about it. But that's genuinely how I feel because there is no logic due to which I would have gotten this opportunity, right? Like I wasn't the brightest mathematics kid. I wasn't the best Harvard grad or any of those.

I think when did I think that, you know, COVID was really that time. Right? There was COVID and I think when I was just starting with some good summer time. COVID was still actually better because I had enough cash in the balance bank, right? There was 4 months of cash. There was a lot of capital. When I started with the hand-to-mouth, it was so okay. What can get me room today? I don't know what they need to do, how do you make the next day? Cost, right? So that was really hard. I think that was probably the hardest because I once did not have a place to live in Delhi. And I had moved to Delhi because I was starting this business. This was before the Thiel Fellowship and I had just one guest house. And it was a big question because if I called my family, they would certainly call me back. They wouldn't want me to be far away in a different city. And if there was this thing which was so close, yet so far. You felt that it was not possible to overcome the upside I got. But how do you survive the next day? And that's when I figured the power of friends because there's a friend I knew. He said to me outside outhouse where I lived in Indirapuram garden. I lived for I think almost 6 or 8 months at a friend's outside room. He was very nice to give me the place to stay. So I think that was probably the hardest which is when it really felt that why am I doing this because you see your friends and you see they are debating which college I should be going. What should be my freshest party? And those are the pictures they're sharing. And here you are where you're in a bursati in Delhi. It's not fun. So that's probably the time. I think COVID was hard but not as hard.

But four months cash, right? Like that's a lot of time. So, just imagine somebody sitting here, 32 years old, 2,500 crore rupees profit EBITDA. Just imagine. And in just very shortest possible time. And serendipity you can say, but something else must be there.

Guransh, right? Guransh. Guransh, thank you so much for the question. First of all, I'm so impressed that a 16-year-old came and sat through the entire session having this kind of attention is already success. Thank you. Because most people don't have this. What do your parents do, Guransh?

That's fantastic. You're well groomed yourself. Thank you. So, Guransh, I'll tell you a good example. There's a reason I asked about your parents. For a young person it matters a lot what their parents feel about them far more than what the world thinks about them. It mattered to me as well about what my father or mother thought about me. So, when we are growing our business now, Rajiv ji knows this. When you're growing your business all these newspapers say valuations and so on and capital raise, that's not coming to you, that's coming to the company. So, my parents lived in the same house all through the journey of our company's growth. So, all their neighbors thought was these guys have become extraordinarily wealthy but they're trying to hide their wealth. Reality is I was also just surviving. My salary was 15 lakh rupees until four or five years ago. Because as an entrepreneur you're not taking salary, right? You're focusing a lot more on business growth. Surely it's not unfair also for an entrepreneur to also ask for higher salary to begin with because you don't want to take from your own company. So, those are the good times. But in the tough times, when COVID hit, I was explaining, there was a lot of bad news about our company. So, what one of our relatives did is they actually made the effort to print out some of these news articles which said, 'Company shutting down. Company doesn't have money.' etc. Especially, I don't know bought or they already had those highlighting pens. Highlighted specific areas from another town and sent a courier to our home to our mother to say, 'Did you know this is happening?' Right? In my mind, and then my mother called me worried. And her biggest worry was because the article was so negative that she thought I was finding it hard to survive. Remember, same time we had 4 months of cash, which is great. And she asked me that should I send you some pocket money? That's what a mom does, right? But my heart sank because by then I had started sending money back home. To be in a situation where you are sending money back home and your family feels other way. That was in my mind the really emotionally, not professional. Professional rock bottom what I like to chortle about which was when I was starting. But that was emotionally the rock bottom because you know in businesses when you're successful, you get a lot of claps. But when you're going down there's not much of it. And no one's with you when you're down. I actually those I think I told this many times. I think what you find in our Indian entrepreneurial ecosystem is our startups have more friends than one imagines. Less than one expects, but more than one imagines. To your point of what keeps you going in those times, my biggest perspective is you know, my family always taught me you show up. No matter how painful, how challenging, you show up. There are meetings where you don't want to go but you have to go. I feel like you have a meeting where you're going to get beaten up but you have to go. But you show up. You have to be clear that you show up. Then you know, Rajiv told me, Baba Ji will take care of it. Thank you so much. Thank you.

The first one becomes easier with good profits. Look first off I don't know how many of you know actually he's probably the most high energy entrepreneur that I have found. When I will be showing up this guy shows up and he shows up like how. I'm deeply impressed by him. And every time I feel that in the next round I will invest he finds a valuation that is far higher than the valuation I would have imagined. There you go. So he's I'm very impressed by actually. The key actually comment is about team. If you think about it in today's generation the companies that we are building we don't have a lot of capex. Our capex is our team. If you have a good team that represents in the numbers if you don't have a good team that doesn't show up in numbers. So there are three four things that are very important to me as you build our team. The first one was finding people whose value system matched with mine. So you will find mostly a model as a hand. By the way our company has a unique distinction of close to 3000 companies over the years have been created by employees around the world. India has a lot of so which have left our company and have gone and started up their businesses. To up China may die, Middle East may die, South East Asia may die, Europe may die. South East Asia, Europe, Mexico, Colombia most valued companies Oyo employee. We take a lot of pride in building a culture which is very entrepreneurial. And that has translated in results. Last year the Shark Tank producers were so unhappy because one of the times all startups for a few episodes like Oyo I was in Oyo I was in Oyo I was in. The second thing that is very important about is our colleagues also become the top professionals in startups in India actually company of Atari. The CEO of Swiggy is food delivery company is ex entrepreneur. CFO of Lenskart is ex entrepreneur. I think it's not coming to me but there is almost Flipkart's head of finance of the e-commerce business is ex entrepreneur. So we have leadership to a Marriott trainer could be one then they sort of find great opportunities across. Three things that I work with and I'll be very quick. First find people same value system in my children share say at home. Come come both hunger at I do me any get that you may not come come really but I eat you I mean come truly thankful for it to be come with we will take it with all our hands. Or this era communication is very critical to me. I communicate and I expect people to communicate but the resolution but he can get to get so good. So find people with similar value system regardless of background. Second references work better than anything else. I might almost come references to recruit inspired by the TL mafia where people mafia to keep buying entrepreneurs to buy Rajiv multi-billion dollar companies Elon Musk founder Max Levchin from Yelp did you say sorry people employees of the day. I mean Peter Thiel you have to get to recruit you. Because nobody wants to bring people who are not as bright, right? Like they all want to be around smart people. So that's sort of brought the team. That's what worked for us. So at one point of time more HBS grads worked for our company in India than any other company in India. Of course, around the world in our company, but in our company itself. So long story short, that's the second one. And the last one is to just give good respect. I think I have learned that giving mutual respect is such a small thing but is so hard in availability. So if you just give respect, find good people, life is good.

So they keep asking the basics to up curtain. You do the basics of saying size of opportunity, probability of execution. So they're all understandable. Most people think about it. Second most important is to find friends around you, mentors around you who will give you honest feedback. For me, one of them is him. I would call Son Sen often, the founder of SoftBank. I would like whoever you can get, right? Like I don't sometimes you may not find Son Sen, so you'll find your friend partner at SoftBank. Sumer, he'll help you. Whoever the right. So, long story short, once you have enough feedback you have gotten from mentors, people who are executing on the ground in the same industry, then you make a judgment, which is a combination of objective and subjective. But once you make a decision, that's where the most important part is. Whenever I pursue an opportunity, there I am roll up my sleeves and I execute at the last mile. I have learned that I am a ground-up entrepreneur and possibly will be all my life. It can either be a boon or a bane. But I have learned there are many people around me who are extraordinarily bright. They come from McKinseys, Harvards, and so on. They're extremely bright and top-down thinking. But the ability I have to go and execute on the ground, when you're starting something, that I feel is the best in me. So, I feel I will bring that value on the table. We will generally both of us have FOMO. The Monday morning I'm on a management committee with them. In the management committee, we all prepare, right? Everybody stands up and says whatever they're doing, what is the plan for the week, what are the Think about it like a scrum, but at the leadership. Sunday evening when I'm preparing, I have a lot of FOMO, because I feel everybody's so bright, so accomplished. What value do I bring on the table? And I often think that the value I bring on the table is I have ground context and field context like never before, like no one else. Also, I mean I have been traveling a lot. Because I feel like that if I show up, I will bring insights that others cannot find with data. Anecdotes always tell a story which is better than data. And my perspective is get as much of those anecdotes which can make a reasonable change to the business. So, long story short, in the US, we just launched a new brand, which is a premium extended stay brand. Extended stay is like service apartments. If you speak to our teams, they'll tell you I am spending like 30% of my day, which is India time, 10:00 p.m. my work starts. It's like that. Or at 4:00 a.m. because US to US teams to to be awake at that time. 10:00 a.m. to 4:00 p.m. single day we will go through what was yesterday's performance, what did guests give feedback for, what was the productivity, what are the new sites coming alive, what is the production quality. Because my sense is one side build the converted from art to science in the first 20 30 location. It can be replicated. That's the part I feel sometimes when companies become too big, the entrepreneur do not spend as much time on at least in my own experience.

See the first and third are combined, so let me take them as one answer. The honest answer is that when we scaled so quickly we made mistakes and there were situations where the quality suffered. And that was in my mind and reflection the biggest challenge that I saw or at least I think we had back in the day. It was also an outcome of not having stubborn decision making. So in my mind, stubborn decision making is an outcome of mistakes where you learn that every marginal person will come and give you some advice. Right? It is your job as a leader of the business to get the right balance because the person who's giving you advice is giving based on the context they are aware of. You have much broader context. Your job is to listen to that advice and take it into consideration. But, how much you apply should not depend on how bright the person is or what their experience is. It should depend on the context of your own business. And that's the mistake I feel we made which we have changed. We grew our OYO business initially with marketplace like a franchising kind of concept. We have aggressively and brutally converted massively towards a self-managed or company-managed format. We call it company serviced. And now majority of our revenues come from there and we're very clear that we'll continue to push in that direction to make sure that we can deliver a consistent quality that we stand for whether it is for OYO, Townhouse, or Collection in Economy, or in Sunday Hotels, Bel Villa, Dan Center, etc. which is our premium segment. And the governance linked to it is very clear which is that it is very important that you Most companies of our size have the board, shareholders, mentors around them. But, often as an entrepreneur or as a CEO, you do not talk about the bad news. You talk about only the good news. And in our mind, we have instituted two policies to change that. The first one is every few months we have what is called an elephant in the room discussion. It's inspired by Mr. OP Bhatt, very seasoned leader of SBI back in the day. He used to run it. It's a cathartic session. You're not allowed to say anything good. You have to only say what is going bad in the company. And by going bad in the company, you mean bad by the leader. And you sit there, listen to it very respectfully, make notes, and at the end you acknowledge all of them and say how we'll improve. It humbles you, it gets you a lot of clarity. And that makes life so easy. And the second one is just having less insecurity, which is easier when you're a shareholder and a non-founder. It is harder when you're a professional CEO. But our board meetings I go and transparently say 'Okay, this problem challenge I want you to hear from me before anyone else.' I would have to give you this to get this solved quickly. That has been of great help for me because then I don't have to guard against information. I can tell our board this is about the company or my team can get you this quickly because we have to get our company better quickly. Nobody is here for any specific motive.

The second question you had was you have so much knowledge and clarity and you know sometimes. Yeah. You know you listen to people around you. You do what you have to do. And but I think in my mind if you listen from everyone around you. Another person who actually architects or pushes a lot and this is Leo Puri, another guy who I'd highly recommend if some of you are not working with him to find. He's also very good. So I think there are few people who I've found around me who are extraordinary in high quality of governance and that has made me appreciate the value of it.

Which is how when you started you have no capital, so what's the first step? This is the issue that 99% of the people who have a dream of entrepreneurship struggle with. When I started, one of my biggest questions in life was how do I start? Another mentor of mine, he said that it is always a chicken and egg. Because most people think first I receive capital, then I start. And most investors would say first you start and demonstrate traction, then I provide you capital. It's a chicken and egg again. I have learned between chicken and egg, chicken came first. You have to make one, right? I will show you how to get going up or frankly depends on your entrepreneurial ability. So, long story short, simple answer is step one, do consulting, do a job, whatever it is, get the resources, and on the side try to build your company. Hence, starting early is good. And once you have traction, you'll get capital. Those are not two entirely different things. Both are equally valuable in my mind. Thank you.

Something good to say something mixed I would say but I don't think you have to do it. Too much of anything is not good. Too little of anything is not good. You have to be stubborn. But you but it's not stubborn to the extent that you don't make changes because what you start the business versus where you will be in 10 years there's a huge difference. The love to do the love is a way of life. But how much you change and what you change eventually depends on you as an entrepreneur. So, my perspective is don't be a worse to feedback. But don't take too much feedback. Somewhere in the middle. Neutral. Correct.

See, before that I want to share that when you're a leader of a company I am very clear I have no misunderstanding. Whatever decision the company makes is your decision. I will go your way but it will go your way but as a leader you have some accountability for it. Not nothing. So, I'm very clear with that to the point of biggest mistake that I and our company have made I think I just mentioned that we grew quicker than we should have at one point of time and my big learning is that it's important to have guardrails for growth. I have simple three guardrails today: customer rating should be average 4.5 plus, property owner should make more money than they made last year as a especially in property of the quality is good, and the last is margin has to be double digit percent or close to that. Until these three things are there we keep growing as quickly as we can may or may not we'll take some time and fix it. That's how I think.

No no we should we should talk you should write to me at [email protected] okay but more importantly it is our mistake that we haven't connected with you yet. We will do our best. We should definitely connect and explore hydro wellness offerings in prison and bigger point is that I do want to use this opportunity to share that India is in the cusp of tourism greatness. Earlier it was domestically and Indians traveling overseas. Now with our Prime Minister's push, I actually believe that it's going to be one of the best things for Indian domestic tourism. Next 1 year or 2 years I think is possibly because in some way I always believe that after my absence it's a tough time. The world is going through challenges, travel is hard and so on. But people still want to travel because kids are growing up, they have school holidays. I think this year is possibly going to be one of the best for domestic tourism in India, domestic weddings in India. And in this period if companies like us and yours do not take the opportunity of pursuing wellness and we've been by the way looking to launch very soon our wellness focused brands with everything that red light therapy, the longevity, all kinds of those things. Steam, sauna, whirlpool, jacuzzi, cold chiller, cold shower, swimming pool, stuff, red light therapy. So you should definitely.

Yeah, you you put me in a conflicting place because let me try. Let me try. Let me make a very simple 30-second perspective of what would I learn in AI if I was starting now. I would begin by of course ChatGPT and use it like a search engine. That is the easiest thing that anybody can do. If you have not started, that's the simplest way to start. Once you've done that, I will go one step further and use AI for researching on market context and business context. Again, ChatGPT can do it. Third, I will use AI to read my documents and give context. Again, ChatGPT can do it. The fourth is to create documents, which is for the first time you tell storylines and perspectives and let AI do it for you. I would say that's a combination of ChatGPT and Claude. Let me go to the other extreme. Let me give an example of something my computer does every day in the morning. Every day in the morning at 8:00 a.m. I have connected a Mac mini to sort of continue running on the back end. My system would automatically identify the occupancies of all my hotels. Whichever yesterday did not perform will draft an email about your property did not perform. This was supposed to happen, da da da. Will have context which I have helped train over time. Put the send on the general manager and copy the regional managers for the low-performing properties and send an email out or the booking per property is lesser. So, for the first time, the general manager thinks that Ritesh woke up this morning. He doesn't know that I'm sending This is going to thousands of people, right? They think that Ritesh woke up this morning and he sent this email specially for me. So, they also put more effort to respond, send a detail, and so. It of course automatically responds to my or at least creates drafts for my WhatsApps, Teams, and so on. And I get to of course review it before it is sent in terms of responses with context. Which saves me inordinate amount of time to pursue my other things in life. Here, of course, you can use Claude or ChatGPT. And if you're slightly better off, I still have to Claude code you have to code X me. Well, I have to actually command prompt with it. Which is much easier for your computer's memory. So, you can just copy-paste that on the prompt and it will automatically send all of those emails. But, those are just These are still basic things that are even much better things that you can do with AI. But, I thought if one is starting, what are the few basic things I would encourage to try?

I think the value of money and relationships, both of those, right? Like, I grew up in a town where every rupee mattered. And I remember seeing the amount of trouble little things or little money had. The appreciation of money goes up a lot after that or rather the misappreciation of it. Because misappreciation because you then feel key 8 crore rupee 50 lakh rupee person with no money at all because he can't even get that money. It just becomes so if you've seen that perspective, right? So, that's one. And the value of relationships because there people are not friends with each other or related with each other because of any resource because there is no resource to give each other. They have nothing to give you. But, you have love, warmth, and ability to support each other in tough times. Those are the two things and even now when I go there you'll find some tribal women who will come from the nearby hill and they'll come and bless me. And the reason is their mom used to know me who passed away. I was there recently and I remember seeing some of these women which is so heartwarming and for them they have no context of what you're doing, why you're doing. So it's a unique place in itself, I think.

I have learned any individual opinion is shaped by their mindset. Comes from religious tourism or equivalent towns from across the nation. And more importantly except for proud of you. Except for some biases. You have to start somewhere. I don't think you should be worried about it. There should be zero concern of failure. When you should make out the cost of thinking is free.

The most important is if you think about the talent that we are talking about these are all extraordinarily smart talent. When you get a life with a generally looking for two or three things, they're looking for mutual respect. You have to chill over here to come and not work with somebody who you know, mistreats you, talks ill, does not have a basic format of communication. Uses curse words. People really don't like it. They may. Right. Do they expect key? Yeah, we have to intellectually smart come here and sound intellectually curiosity would be. Yeah, I don't get intellectually curiosity for a whole part of you. Or this one. Do they feel pride in what they're doing? I'm going to have to just have to go to the coffee shop and look at McKinsey Harvard and see what they do. Right. Such a key family school but I didn't even McKinsey Harvard what they. I want to put the McKinsey shipping company with chemical company here. I'm going to have to come get them. They can see our products around themselves. Right? When they travel overseas, they stay at like one of our hotels or vacation homes. Suddenly the sense of pride among their parents, their relatives, etc. is that I'm going to watch out for actual business credit. And they all treat of themselves as business people, not like employees of a corporation. So if you can give good mutual respect where they feel that they're treated with and there will be pressure. There will be disagreements. There will be shouting matches. But none of that justifies curse words, ill-treating people, none of those. Second, being able to ensure that you have a book and get intellectually curiosity for a whole credit and you need to have an intellectual and you need to have a new contribution. Or this one or should I one of the most important is doing something that people can relate with for anybody who has grown up in a small town in India. They can relate with the fact that finding a clean comfortable room is very hard. Right. Once you solve that they feel like this is something that I can relate with. This is not like I can't relate with doing multi-billion dollar company car restructuring, but I can relate with solving this problem. So those are my thoughts, but we'll probably bring it to a close.