My name is Ritesh agarwal I am 21 years old I am currently running oyo room company I am the founder and CEO of this company Just announced in last 24 hours cutting 20% of your workforce in India, layoffs in china as well and also in third of your workforce here in US whats behind this vision .
As you really try to cut down your cost all i am gonna share about is the framework that i have learned toward time and ofcourse its for everyone else to take out meaning out of it so its a lot more about my own journey about scaling the company .
Think that in the age of 18 your earn 1 lakh rupees per month what life it would have been well in the same way if Ritesh Agarwal would have thought then OYO wouldn't have been such a big company because at the age of 18 he was earning 1 lakh rupees per month 10 billion dollars valuation .
More than 80 countries more than 10 lakh rooms just in the span of 8 years OYO How did it become such a big company? After all, what is OYO's business strategy which no one knows and what is that important business lesson which we can learn from Oyo .
And implement in our business In 2007 when Ritesh Agarwal was just 12 years old and by selling sim cards he started his career and traveling became his passion sometimes here sometimes there but how is traveling in student life you all know very well the pressure of making a career .
Loose pants and empty pockets his this problem introduced him to a new problem and that problem was lack of good and affordable accommodations the ones that are good are not affordable and the ones that are affordable are not worth living and at this point, OYO started In Gurgaon's Hooda city center .
A small hotel which has only 15 rooms and its occupancy was just 19% by investing 35000 and refurnishing things 999 rupees after listing each room the occupancy increased from 19% to 90% and at that point Ritesh Agarwal understood that if we give people good rooms at good prices .
Then people always prefer taking it and from here only OYO's first strategy was made oyo's first strategy is The power of predictability think that if you order a burger and you just get a pattie how will you feel? this was the same with people .
When people used to go to affordable hotels to stay sometimes the bedsheets were not clean then sometimes ac was not working sometimes bathrooms were not clean or sometimes there used to be no water before Oyo customers had no idea after paying money which things they will get 100% and to solve this Ritesh sir made .
The Oyo standard In Oyo standard, 7 promises were created no matter which oyo room you go you will definitely get those First, 3 click booking you can book any Oyo room with just 3 clicks second spotless lenin in every Oyo room you will get a clean bedsheet third free wifi .
You will get wifi in every Oyo room fourth AC you will get AC in every Oyo room with this, in every Oyo you also get an early check-in facility and then he discovered Value life cycle In simple words from making one product to selling it to customer .
And making customer delight which things are necessary that all is a part of value life cycle for example if apple has to sell its new iPhone Then until selling that iphone which things are involved firstly the features of iphone are decided then it's designing .
Then it's manufacturing then operating system is included inside it then packaging will take place then apple will host its event where they will market about their new product and after that product is sold this all things together make apple's iPhone value life cycle similarly, how is Oyo's value life cycle made .
Firstly a property is signed up after that Oyo standardize that property that means it is brought to Oyo standards that is refurnished Then that is sold and after that at the end To provide good servive to customer is taken care by Oyo the life cycle was discovered but .
To master, it was very important and inside this lifecycle there are 2 tasks which are very heavy and are very much important for Oyo and to make these 2 things error-proof Oyo used 2 more strategies and the first strategy won't work without a second oyo firstly identified in their ecosystem who are the key stakeholders .
And what are their requirements so oyo mainly identified 3 key stakeholders first was Hotel owners what they want more revenue the second was managing staff what they want mainly ease of doing work and respect and the third was customers .
What do customers exactly want so customers want quality places at affordable prices to manage all this properly Oyo firstly built a technology infrastructure at every 6 hotels of oyo one cluster manager was appointed with the help of crypton app of every hotel total bookings per month what is its revenue forecast .
How is the staff performing there what is the return of investment of that hotel can monitor all these things and not only this hotel partners also got this technology so they can easily manage their hotels for customer application ui/ux was made so easy to use that customers can book a room in just 3 clicks .
But what is the other strategy which helped oyo rooms from 3 properties to touched up todays more 10 lakh rooms but before that i want to introduce you to vauld vauld is a earn, borrow and trade platform which works like a crypto bank as you get interest when you keep money in the bank in the same way vauld give .
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The second strategy is Playbookization to sign up the property and to standardise it this two things are very much human-intensive and time-consuming tasks which means more time is required and also more human labour is required to create speed in this .
Different playbooks were created so every task has its fixed process to sign up a property to transform property and also to recruit staff for all this things different playbooks were designed properties are identified in one area and on 1st day all those properties are signed up next day auditing is done to all those propeties .
In which property which things are needed which things are necessary which things are necessary to repair and on third day oyo's mini trucks with the standardization material visit to the properties and transform all those properties on fourth day all those properties are live on the app .
Where oyo's competitors to acquire 100 properties 3/4 months were required on the same time oyo with help of playbooks within 15 days they used to acquire 100 properties due to this things Oyo's business started growing at next level but in Oyo's business model there was one big loop hole firstly oyo worked on the aggregated business model .
Where Oyo used to take hotel invetory on lease and used to standardize and sell them on its platform and in this some hotel owners used to themselves book oyo rooms and then by buying into cheaper rates and later sell customers at higher rates from this, they used to get Oyo's profit and customers used to get expensive rooms and finally in 2018 Oyo found a solution .
Oyo switched its aggregated model and moved to the Franchise Business model now oyo partners with hotel and give them their franchise and takes 22% commission from them on every room booking from this, it happened Now anyone can book the room Oyo's profit was secure .
But do you that Oyo uses a secret strategy which is not known by most of us That strategy is Power of motion study & self-esteem so try to understand it carefully Fredick taylor who is a teacher of scientific management he says one thing every business has 3 types of motions .
Number one productive motions this are the motion which actually creates productivity number two incidental motions this is that motions that are not necessary but still, these motions are done and number three unproductive motions These are that motions that are completely unproductive which has no results for an example .
You have to pick up a box and take from first floor to second floor through a ladder for which firstly you remove your shirt after that, you pick up the box then you put the ladder and climbing it you keep the box on the second floor so in this activity, your productive motion is that you picked up the box and kept box on the second floor your incidental motion was .
You picked the ladder placed the ladder after that climbing on it you kept the box so this is incidental if the ladder was already present there was no need for this motion and third removing shirt which was a completely unproductive motion Taylor says that we should completely eliminate unproductive motion .
Try to reduce incidental motion as much as possible and productive motion should be increased in higher rate similarly oyo , the unproductive motions in hotels like the nonsense talk between employees keeping written records and also operate full-service kitchen all these unproductive motions were completely eliminated because if they are not present their is no harm in the business and to increase productive motions .
Oyo created processes provided training to staff for those processes spent more money on training created 26 training institutes so that every staff is provided proper training even when if any staff makes a mistake and there is a complaint against them then also they are not fired they are sent back to the training institute to retrain them .
And after that, they are again kept on the job and to minimize incidental motions Oyo introduced Oyo toolkit when every customer checks in Oyo This toolkit is given to them at that time itself This toolkit has shampoo, soap, toothpaste all this are already present now see how powerful is this tool so see .
Oyo's staff individually had to go to each room Soap,shampoo,toothbrush,toothpaste ,conditioner had to keep all this things but since oyo toolkit is introduced all these things are provided to customers at check-in time only and so much of staffs time is saved there is no need for them to go individually to give this thing with this that toolkit most of the people carry to their home .
That means there is free branding of oyo in their house too and in that toolkits, there are some coupons mostly they are oyo's discount coupons but those coupons are actually called self-esteem boosting coupons why is that so? so understand carefully have you ever felt bad for helping someone? I am 100% % sure this has not happened we all never feel bad for helping someone .
We feel good only about ourself the same psychology is used by oyo with you the coupons inside the oyo toolkit when you share those coupons with your friends or family Or anyone else then they get a discount on their oyo room bookings which helps you to boost your self-esteem why? because with your help someone is happy .
And the person who used that coupon gets a discount so they go to oyo rooms only so oyo gets customers and you get customer delight because you got that coupon because you went to oyo rooms and by sharing that coupon you felt good about yourself now most important thing which are the business lesson we can learn from oyo we can implement in our business .
First lesson, become a subject matter expert talk with your customers and learn in which things they face the problems and which are the things that matter the most when Ritesh Agarwal started oyo he personally use to meet the customers and by interacting he used to ask tell me the things in which you face problems which things can we improve .
And what are the things that matters to you the most where you can't compromise always remember this if you don't understand your customers well enough then your employees will never understand them second lesson, Build a scalable proposition find things in your business which are those things whose processes can be formed .
And whose processes can be formed and can be replicated with speed because process creates repeatability repeatability creates scalability and third lesson Find errors in the things which you think are errorproof find mistakes in that thing where you think there will no mistake if oyo rooms would have found mistakes earlier that in their business model .
then they would not have faced losses up to 2018 and they would have changed their business model at first similarly you need to find where in your business mistakes may occur and don't forget to check out vauld link is in the description and similarly, if you want to know about starbucks business secrets .
Then you can watch the video at the right or else amazon's dark side can be known by watching left side video