OYO Rooms is being built on the belief that predictability in hotel accommodation will push more Indians to travel and explore. We are trying to solve a large problem and there are many roadblocks on the way. As an entrepreneur, it's very important to persevere and be convinced about what you are trying to achieve.
The idea behind OYO Rooms
I actually dabbled into the hotels aggregation space. I never really thought about it; it just happened and we went for it. Few years back, when I was running Oravel (an Indian version of the global online rental site Airbnb), I used to stay in a new property every day. In the process, I lived in over 100 properties and hosted guests staying with us. We realised that the problem in the hospitality space was not of discoverability but that of predictability. Let me give you a jigsaw of experiences. When somebody lands in a new city and calls the hotel, nobody picks up the phone. You are somewhere near the hotel and there are no signboards. You go inside the hotel to see a sleeping receptionist who is under-dressed. Inside the room, the mattresses are torn. Massive problems for the traveller. Our belief is that India will travel more and stay in such accommodations only if you build predictability and trust in the hotel experience. That can happen only if you deliver something like an OYO.
Yes, there were umpteen challenges. Having said that, there was lot of excitement as I was a teenager when we started. You know that you are at the cusp of building a great company and that you want to solve a large problem. Every entrepreneur will tell you that there are challenges almost every day. You can oscillate between extreme highs and lows on the same day. However, the toughest part was when I went broke after staying in 100-odd hotels. I didn't have family or friends in the same city. If I were to call my family for help, they would have asked me to promptly back my bags and come back to Odisha. The most difficult thing is to keep at it even when there is no financial backing or a decent support system. That's also when you feel really lonely. The reality is that entrepreneurship is a lonely journey. I persisted and I am glad I did.
The first round of funding
Lightspeed Ventures was our first institutional financer. It's a beautiful story that has been well documented by Maninder Gulati (Lightspeed's Principal) at various levels. The year was 2013 and I had just become a Thiel Fellow. I was in the US when Gulati reached out to me. The wonderful thing about Gulati is that he has been an entrepreneur himself and so he knows the pains and the efforts required to build a company. In one of our initial conversations, Gulati said: 'Even if we don't get to work together, I'm going to help you'. I think that was the catchpoint really. Then I met Lightspeed India MD Bejul Somaia, another brilliant person who has now become a great friend and partner. Lightspeed took an aggressive stance in saying that they will back a disruptive company which is doing something that has not been attempted globally.
Recently, SoftBank led a $100 million round in the company. I would like to say that SoftBank's Nikesh Arora is a very good human being. He tells me: 'Ritesh, OYO is your company and we believe in your vision of building this brand and solving a large problem. We can give you feedback and help you with connects as and when required. But, we expect you to be the one driving the company.' That's a very interesting balance which gives a lot of comfort to the entrepreneur.
Advice for budding entrepreneurs
Firstly, I don't consider myself to be poster boy of India's entrepreneurial ecosystem. I am just trying to solve one of many problems out here. For any entrepreneur who is watching us, the key is perseverance, especially if you are solving a big problem without imitating an existing player. Perseverance and conviction are important traits to keep you focused. Many naysayers will try to pull you down by saying that your dream is not executable. Ignore them. Devote yourself to your dream, work hard for it and the results will follow.
(Twenty-one year old Ritesh Agarwal is the founder and CEO of OYO Rooms, a budget hotels aggregator that is currently valued at $400 million. A college dropout, Agarwal's entrepreneurial journey began when he was 17-years old. He is considered to be one of India's youngest CEOs. At present, OYO caters to over 15,000 rooms in 90 cities. The company is gunning for 50,000 rooms across 100 cities by the year end. Click here for more on Agarwal's journey)
As told to our correspondent Varun Arora.