In our country, there is a huge problem of finding clean comfortable hotel rooms in the budget segment. When I was growing up, we often used to go to religious destinations. More often than not we stayed at our relatives’ homes because there were no clean mid-market places to stay. Five star hotels were the only category where a traveler received an experience as per some set or known expectations. Further, there were no budget-hotels chains with a pan-India presence. So even if one knew a good hotel in city A, you would be in the same quandary if your travels took you to multiple cities. This idea wasn’t a great revelation, it had existed for a long time. After my twelfth grade, I was travelling continuously for three months. At that time, I visited nearly 100 hotels – from budget properties, inns to bed-and-breakfasts – and I found something common in each place – they were unpredictable and there was a surprise waiting every time I checked in. At one of the places, the beds would be tall, at the other, the washrooms were not clean. Some other places didn’t accept a credit card, or had no kitchens to serve meals.
From understanding these problems, to creating a business model around it and further convincing people to invest in that idea, and then to run the business – these are very critical steps and many entrepreneurs or start-ups can falter in any of these for various reasons. However, things worked out for me. While luck does play a factor, there are two important things to ensure that you keep on jumping across the hurdles. To be a successful entrepreneur, the first thing is building a great team of people. Most entrepreneurial ventures in India are run by the founders and their friends. I spent close to a year trying to bring some of the smartest people into our team, who were not only sharp but could also roll up their sleeves when required.
Remember there will be failures and we should celebrate failures
This article is a part of FICCI publication “Economy of Jobs” that was released during our 89th AGM in December 2016. It presents essays from India’s leading business leaders and eminent thought leaders who share views and suggestions on job creation. The articles cover varied issues: demographics, education, skill development, entrepreneurship, impact of technology, labour laws, and as well as specific issues across sectors.
More articles from this series can be viewed here at: Economy of Jobs
Entrepreneurship doesn’t restrict itself to age. I was just out of school, trying to convince industry veterans to work with me. This was extremely difficult, but I have observed that if you speak sense, and talk about something that people can resonate with, along with some validation, it always works out. I was lucky I had the Peter Thiel Fellowship validation. There were few angels who had chosen to invest in the company. So there was always some validation to the cause I was working towards. And of course, some of these were genuinely very good people to choose and work with, which is why we were able to build a very solid leadership, incredible professionals in each of their fields. For example, the CFO, CXO and people at the strategic planning level are all veterans in their fields of execution.
Secondly, for an entrepreneur, being true to your idea and not giving up your ambition is the key. For instance, we have set up a small training academy to graduate students through our own training systems. The reality is that if you look at the current convention, new age digital companies are not expected to do all this. However, for us, delivering service is the top priority in whatever we do, which is why we not only have this training academy, but we also have more than 300 of our staff on the field in different cities to ensure we can standardize the facilities and audit them after every three days, to ensure service is extraordinary. If our guests need any service, we are there in person to deliver the service. A good entrepreneur is a good nurturer.
The idea of OYO came about during the phase where I was switching from our old brand Oravel, to our current brand OYO. What was interesting was during this phase, I learnt from many other entrepreneurs that building something new is very important. So we are a unique company solving a local problem and not an emulation of any US company. The reality is that at present 30 other companies outside India are emulating us. Thinking big is an important factor. Initially we used to think that we will have 10 properties, but over time, our aspiration grew – to aim to become one of the world’s largest hotel chains. This has brought us to the present scale where we are India’s largest and world’s 14th largest hotel network today. We have a clear direction to become the world’s largest hotel chain especially because of the capabilities we are building.
In India, the last two years have been a great opportunity for nurturing entrepreneurial mind-set. However, there is still a need for the social outlook to change towards entrepreneurs in India. I agree with our Prime Minister who has stated that our country should be a country of entrepreneurs. When people see that and parents hear that, when a kids comes up and says to his parents that I want to be an entrepreneur, it’s not that tough anymore for a parent to say that my kid will become an entrepreneur.
But people need to understand that building your own business is very hard work. Nowadays, people love the hype and aura associated with Silicon Valley but they are not willing to respect or recognize failed entrepreneurs. This is a wrong mindset. If you don’t fail, you don’t learn. How many times did Einstein make the bulb prototype before he succeeded? Remember there will be failures and we should celebrate failures. It is also true that we as a country have never done that. The best entrepreneurs have also failed a few times in their lives.
It is now imperative to ensure that reality starts keeping up with the hype that is being created, which means there are real companies, creating real products and globally they are becoming powerhouses as organizations. This is fuelling the entrepreneurship revolution to the next level. For example, in the US when the first entrepreneurship revolution started with people like Henry Ford, Andrew Carnegie, they generated huge amount of wealth and then invested in new age companies to make USA the country of entrepreneurs. China has similar examples as well. India must become the country that will create relevant entrepreneurs who solve large global problems of the future.
Policy makers should become enablers for innovation and entrepreneurs
It is difficult for policy makers to suggest changes, especially in this sector. Entrepreneurship is dynamic. The world is changing very fast and to keep up with these changes, the policy makers need to become consistent enablers rather than doers. The policy makers should recognize ten things which can be done to open the market and let new people come in and start operating or creating new products. My request to policy makers would be to become enablers for innovation and entrepreneurs. The youth should realise that to reach a certain place and to change the world, it is a hard journey. If you choose to get in there, then become perseverant and hardworking. I have been in this industry for the last four years and what I have seen in this industry is that you need to work hard and persevere to reach a place where you start making an impact on the society and stay focused on that.
In my mind, hospitality is one sector which is waiting to create hundreds and thousands of jobs and clearly so, because of a couple of reasons. We at OYO want to recruit people for our self-run properties as well as franchise-run properties. In both of these, we see employability. The workforce is not skilled, they are not trained enough to do things in a specific manner. This is why we have invested in our training academy to skill people and ensure they reach levels of competency to come and work together. We see incredible passion among them to join and work with us. We have recently signed a partnership agreement with the Skill Ministry as well, to train 30,000 graduates over the next five years and employ them in the hospitality industry.
We cannot run away from the technological revolution. There will soon come a time when we will not need humans during the time of check-ins. It will all be automated. However, when people are replaced with technology, there isn’t a zero sum game because hotels have been struggling for a very long time to build a great culture inside their accommodation. We are investing heavily on front office staff, who can be great community managers and not restrict themselves to their daily mundane jobs.
Hospitality, by definition, means welcoming and making people comfortable. Indians are known for their hospitable nature. But today, there is a lack of adequately qualified people for this industry. To solve the problem, we need the government to help in facilitating training and empowering the workforce. Additionally, the industry or the private sector players need to ensure that there are sufficient employment opportunities for skilled people entering workforce. India already generates smart graduates, but the compensation in hospitality industry is not up to the mark. Thus people start looking out of this sector for better opportunities. We need to make sure that these smart graduates are employed with a good life so that they can further influence others in their network of family and friends. The youth should look at hospitality as a lucrative career option.
The investment in the transition needs to be done by the government and the private sector in collaboration. However, reality is that private sector needs to do more than the government. The government is doing a great job as enablers in the last few years. Talent however still remains one of the biggest concern in the hospitality sector. In tier 3 or tier 4 cities, we have adequate number of people but not enough skills, visibility, understanding of best practices, work ethics and culture. Given that hospitality has a segregated market, technology is the best way to reach out to people. At OYO, all our content is fully digitalized.
There are two important skills which we want in this sector, empathy and soft skills. Earlier, if someone wanted to join the hospitality sector, they had to leave their home, go 300 km away from home for two years for training or college. Whereas in today’s time, they can go just 500 meters away from home and learn all this online from a computer. They can probably take an exam on their mobile phone and clear the first level in hospitality. Further, they can take break from their regular work for two hours and undertake the course. Digital education is thus a very big focus for us. We have already started working on this and in next six months, we will build a complete set-up where anyone can come and work with us, to ensure quality of talent is retained and hospitality is seen as the choice of industry to work in the times to come.
In the next three to five years, we plan to target more than a lakh people through our initiatives. We believe this industry is growing at a ferocious pace and we can indeed do something better and on a bigger scale and create large scale employment.
Ritesh Agarwal, Founder, OYO Rooms writes this piece for FICCI publication “Economy of Jobs”