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Upending the age-old business of Clubs | Vivek Narain@ The Quorum
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For a lot of people, hospitality is their ultimate entrepreneurship dream, and they aspire to start a restaurant or a cafe and quit their stressful corporate world career.
In this episode of the Founder Thesis podcast - we speak to a hospitality founder who has built and scaled a truly unique hospitality business and given a new age avatar to a very old business.
Most of you would be aware of the concept of clubs. Iconic clubs like the Gymkhana club in Delhi have a membership wait time that is measured in decades!!!
Vivek saw that there is a massive gap between such old-world clubs and the young India which also aspired for a third place where they can belong to a community, work, experience culture or just unwind. And that is the space that The Quorum club is filling.
In this fascinating conversation, Vivek explains what this industry looks like, the business model of Clubs, and the playbook of scaling a very heavily service oriented business.
Stay tuned to get a peek into the fascinating world of clubs and subscribe to the Founder Thesis podcast for more such sector specific deep dives.
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Transcript
Introduction to The Quorum Club
00:00:00
Speaker
Hi everyone, my name is Vivet Narayan. I'm the founder and CEO of The Quorum Club, a globally inspired, contemporary, members-only club um that is the first of its kind in India.
The Quorum Club's Niche and Five Pillars
00:00:26
Speaker
For a lot of people, hospitality is their ultimate entrepreneurship dream and they aspire to start a restaurant or a cafe and quit their stressful corporate world career. In this episode of the Founder Thesis Podcast, we speak to a hospitality founder who has built and scaled a truly unique hospitality business and given a new age of power to a very old business.
00:00:46
Speaker
Most of you would be aware of the concept concept of clubs. Iconic clubs like the Gymkhana Club in Delhi have a membership wait time that is measured in decades. Vivek saw that there is a massive gap between such old world clubs and the Young India which also aspired for a third place where they can belong to a community, work, experience culture or just unwind and that is the space that the Koram Club is filling.
00:01:10
Speaker
In this fascinating conversation, Vivek explains what this industry looks like, the business model of the clubs, the playbook of scaling a very heavily service-oriented business. Stay tuned to get a peek into the fascinating world of clubs and subscribe to the Founder Thesis Podcast for more such sector-specific deep dives. I want to kind of understand what exactly, like, I mean, you did give ah like a short headline of Skora, but what what exactly is it? Just help me understand that a little better.
00:01:38
Speaker
Yeah, I saw this in Quorum, and it is a contemporary version of what is a private members club in today's day and age. And, um you know, we got inspired by what was happening around the world over the last 15, 20 years, there's been a renaissance of these clubs. um And, you know, we borrowed from what we thought would be appropriate for India. So if I can tell you fundamentally what it is,
00:02:02
Speaker
it is It rests on five pillars. It is a hospitality space at the end of the day.
The 'Third Space' Concept and Work Evolution
00:02:10
Speaker
It is focused on building a community of like-minded people. We use programming and culture as a way not only to engage the people, but also as a self-selected bias to attract you know those like-minded people.
00:02:26
Speaker
Art and culture, ah so or rather art and design are an important part of it in the sense that we wanted to create a creative space. And then wellness is a lifestyle, so instead it's becoming very prevalent in everyday life. The quorum brings all these together.
00:02:45
Speaker
And that's really what it is. So it is a members club that brings all of these components together. And it is a quintessential third space, a place to work, entertain, dine, and get culturally engaged and have an extension of lifestyle.
00:03:01
Speaker
the The term third space i guess kind of became popular after Starbucks. right like Starbucks was positioned as the third space, which is like neither your home nor your office. what ah Help me understand this third space as industry. What's the addressable market for this industry? yeah Yeah, so listen, I think though the world of work is changing, the way we work, how we work, what we work on. And and I say it's changing because it's not only ah we're in the first innings of this change. so oh And I think it's funny, I had a conversation yesterday on the future of work where the ISP professor who has written a book around the subject
00:03:48
Speaker
So, you know, the construct of the office is relatively new. ah you know and Actually, he he he sort of made a reference all the way back to the East India Company and yeah had a very interesting example of that. But but I think for COVID especially,
00:04:06
Speaker
ah People realize that they are, you know, they can, they kind of always knew that they could work from anywhere, but post-COVID they realized that they probably did better work, ah you know, when they were in these sort of third spaces. Now, third spaces for different people really different thing. I think functionally, it's a space where you feel comfortable that's not your home and not your work and you're productive.
00:04:31
Speaker
So I think for us, that's that's what it was. But I speak about it only in the utility of work, but it's equal in its utility for socializing, it's equal in its utility for the consumption of culture, ideas, wellness, and lifestyle. So I think that's really what it tells me. And actually, it's interesting to point out here that this is very much our intent when we started this ah business. It was not an afterthought, it was not a force fit. um So you know the ergonomics of our place,
00:04:59
Speaker
were built with this very much in mind.
Vivek's Journey from Banking to Hospitality
00:05:02
Speaker
The way the furniture interacts, the way the space and design interacts, the way the sound and the music interacts, the way the lighting interacts, was very much taught through from day zero in the design. And and so it's not something that was bad kibbar, bad kibbar is kind of an afterthought for us here.
00:05:23
Speaker
Can you give me some examples of what you mean in terms of the intentional design of Koram as a third space? Yeah, so you know when we looked at the furniture for our ah members lounge, we said, listen, I said, people are going to come and work here in the daytime. People are going to come in and meet here. The same space is going to be a place where people are going to socialize, dine, entertain, consume culture, listen to music.
00:05:53
Speaker
So when we were visualizing the design, the choice of furniture also was appropriate. You know, is it too reclining? Is it too low? Can you eat on it? Can you use your laptop on it? So I think that's what I mean by, ah you know, lu kushtic the the sound.
00:06:09
Speaker
ah we're very much I knew where we were going to have, we have a space called the Den in the Quorum in Gurgaon. We have a little bit of a stage in all our clubs, right? ah They were propped up spaces where people sat with a little bit of a bird's eye view, but they were intended to become ah stages for conversations and and and sort of performances. So it was very much thought through from day one, even the way we lift those spaces up at some different times of the day.
00:06:35
Speaker
So that's what I meant, but it was intent, ah um you know, from design, from the get-go, from um sort of ground zero.
00:06:43
Speaker
Why are you a right founder to build Kuruv? What's your background? and Yeah, so, you know, I can talk about it now. At the time, oh you know, I was unemployable. But I think fundamentally, actually i I was fortunate enough so to grow up with a good network and met a lot of interesting people. um and You grew up in Delhi? I grew up in Delhi. I grew up in Delhi.
00:07:11
Speaker
i your so ah My father, ah my grandfather was a gentleman in the army. My father was a fighter pilot. My mother came from a big, well-regarded business house. um They all went to good schools. They were generationally sort of educated, you know so had influence in the old school, maybe not necessarily had the money, but had the influence and access. So I was very fortunate to grow up with those surroundings.
00:07:37
Speaker
um i was well I was always an extra work. I've been a curious human being um so i sort of yeah you know I'm always trying to learn up on new stuff. I'm good with people so that was part of the ideas and community part. I was fortunate enough to marry my wife who's actually, ah you know so let me rephrase, I'm actually the co-founder ah you know She doesn't have the official title but very much the co-founder of our business. um She grew up with a very different background. She grew up with a lot of food and beverage around her. She grew up with a lot of exposure to global tastes and cultures. So the two of us came together and I think fundamentally, I was at a crossroads. I was a banker for many years. I did a private equity transaction in the hospitality space. So it gave me a little bit of a, you know, a front row view on what was happening in hospitality from a numbers perspective. At Yes Bank, you did a priority project. I started with Standard Charter in New York. I joined Yes Bank. I was actually one of the first employees of the bank.
00:08:41
Speaker
um and then i actually know I did a private equity transaction in my personal capacity as an advisor to a large US investor. We did something called a special purpose acquisition corporation. It was one of these funky, very creative structures that were you know ah that have become popular and unpopular over the last 10 years. We were the first people that did that. And we bought a number of businesses in the hospitality space. So that you know by default, I got into hospitality or or got exposed to ah to hospitality.
Business Model and Initial Challenges
00:09:14
Speaker
But post that, you know I continued my career in hospitality. I joined Slamor and Tochels. At the time, it's now part of the ACOR
00:09:23
Speaker
sort of ah brand portfolio but at the time it was owned independently by the Kritari Investment Authority ah and you know it had three brands, Raffles, Flammog and Sisita. So I ran the development business, built a lot of relationships with the real estate community.
00:09:39
Speaker
do what what does that mean development like what does that focus Development in hotel Lakshay is the guy who's the deal-making guy. He goes out, finds developers that are thinking of building a hotel, convinces them that they should build.
00:09:54
Speaker
But you know wherere the we were the deal-making guys. So we had to be what I call in-state, mile-wide. Know a lot about a little everything, but not a lot about anything. So I was that guy. ah But what it did was, it gave me a good understanding of real estate.
00:10:12
Speaker
location, understanding the mind of the developer, built my network, ah and then firm wanted the time in their hospitality. So now it's quite exciting, but you know, 12, 13, 14, you know, firm wanted the time decided to pull out of India and I was at a crossroads. I said, should I move with them overseas or should I remain in India? And during that crossroads,
00:10:35
Speaker
i think i was unemployed ah so i had to i was forced into entrepreneurship and why do you say that you were i mean you've got like i would yeah exp experience like you will probably i think the mind make I had done a whole bunch of stuff and I felt like I could do a lot more. And I felt like a traditional job was not going to get me excited and out of bed. So I wanted to do something a little bit more meaningful. And I said, you know, let's do something on our own. And I got my wife, I said, let's put our heads together, our our our our hands together and take something out of them. I noticed during my stint at Fremont that these members clubs were popping up all around the world.
00:11:19
Speaker
and no one was doing it in India. A lot of people, with some people were talking about it, but no one had really done it. And I thought that it was a gap, but I felt like for the reasons I mentioned on our specific skill sets, I thought we were well positioned to perhaps you know do it. and now yeah you know ah It's been a journey. We're kind of at a slightly different phase than we were than seven, eight years ago, but But yeah, one can look back and say, I mean, it was a bit of a bold and silly idea ah seven, eight years ago. ah It's kind of worked now, so you know one thinks that it's a good idea. idea But I think any any business when it's starting off is is not a business that it becomes one. I think we are starting to become one seven or eight years into our journey.
00:12:10
Speaker
Amazing. The concept of members club has been around for like a century, right? Like Jim Khanna would be like an iconic first club, central Delhi. So what is oh what is different about that? You said that you saw members clubs coming up. I was assuming this would be like a version two or a version three of what a Jim Khanna was at one point of time. What's the difference here?
00:12:38
Speaker
oh yeah so there's a massive difference and you know in whether it depends on it may seem nuanced to some people but in my in my mind there's a massive difference and um so first one of jovkhana or those traditional clubs are what we call sort of athletic clubs right they'll they build a community around sport so you have you know tennis and squash and what have you and you know those people that uh that was one number two is They're 70, 80, 90, 100 years old, but and their community was created 100 years ago. Their children, grandchildren, in some cases, great-grandchildren, it's been fast down.
00:13:21
Speaker
um So the community was built with that historical perspective. um I read a book Akshay around the time when I was starting this business called the King of Flubs. It was written by a gentleman called Bob Deadman. Bob was a lawyer in America in the 60s that started a company called the Club Corporation of America. And when I read that book, I drew a lot of parallels to what was happening in America in the 60s and what's happening in India today.
00:13:49
Speaker
By the way Club Corporation of America runs and operates about 150 clubs around the world right and primarily US focused and they're a publicly listed company and ah he he posited in his book that ah America in the 60s was a country in the world, clubs existed in the past their membership philosophy of more of our key people keeping people out as opposed to letting them in. And there was a whole new sort of shop of people that were moving to and new cities for or or cities for economic opportunities and wanted a place of belonging.
00:14:27
Speaker
right? So I think I drew a lot of parallels to where America was then and where we are now, especially in the context of our business. And you know, we started in Brugao, which is, you know, your quintessential new town, you know, didn't exist 20 years ago. And I think there were a lot of interesting people that didn't know each other, and there were no places that brought them together. um And if I may, you know, going back to that Jhunkana analogy, ah you know, those communities are less relevant in today's India. ah you know I'm not saying they're not relevant. I think there's a whole new relevance in our country. So you know we had an opportunity to blank canvas, start a community from scratch of interesting people, which by the way, has some of those people, has some of the they established, the upcoming, the new and
00:15:16
Speaker
People said, oh, that's oil and water. They won't mix. But I think you know I instinctively knew they would mix. and And I think we've kind of proven it right so in in what we're doing. And like I said, it's early days. But we're seeing this massive opportunity. And by the way, it's not about money. up shit so we like It's about interesting people doing interesting things. And that's and we're building this like-minded community around ideas and where you're going, not necessarily where you're coming from.
00:15:44
Speaker
ah So I think it was a big opportunity. ah I thought so. I kind of now know it. ah But when we started, you know, it was an it was an assumption and a hunch. So what, I'm going to recap what I understood. So like, first difference is sports oriented, whereas this is more of arts. The second difference is In a way, you could say that Gymkhana represents old money. Either you inherit or you wait one or two decades to get a membership. Quorum represents new money, like a startup founder who ah would be a ideal customer profile for you.
00:16:24
Speaker
No, it's but it's it's a little bit more nuanced. Let me try and rephrase that. So one is, there still exists different type of clubs. ah right So I use that as a way how they build the community versus how we build the community. I think there are broadly four categories of clubs. There are what we call aesthetic clubs that are sports-oriented. There are what you may call it um golf clubs that are you know country clubs, what have you, that have sports plus the golf.
00:16:52
Speaker
right In India, we haven't seen a much massive proliferation because land is too expensive. ah you know ah They are what I call residential clubs that could either be in the condominium or within neighborhoods.
00:17:05
Speaker
that exists is what they they'd get a kind of a job of yeah yeah was and about it yeah yeah and And then there's is what we call city clubs. City clubs have always existed, rather than has 250 of them actually, funnily enough. The city club has evolved into what we're doing, which is kind of a lifestyle club. um That is basically its work, play, entertain, dine, wellness, wellbeing, culture, and a big focus on food and beverage and experiences. Not that entropy, subsidize, chai that you get. right so that's that's So that's on the different types of clubs. Then in terms of what you said is on community, ah I think, listen, those communities were built three generations ago. it's You could say it's all money, but it's all relevance. right i want Money is not the track. The money comes, goes, you know rotates, circles around, what have you. I think it's more relevance. We're building a community of what's relevant today.
00:18:08
Speaker
So it's a function of those who are relevant in the past. It's a function of those that are becoming relevant. It's a function of those who will become relevant. What is that common denominator that we're looking at? You know, it's something that we try and use our lens, our filter ah when we are building our community.
00:18:25
Speaker
and just so Can you help me understand how how does the business part of it work? is this ah like I think these traditional clubs are like non-profits. I don't think they are set up as a private limited corporation. how is curru set up and What is the oh like what's the economic model?
00:18:47
Speaker
Yeah, i think I think some of these old clubs that were granted the land by the government on some sort of a subsidy and hence their committee driven and what have you. So none of that as far as we're concerned. right We're a full commercial venture, we're a private limited company. We were actually, LLP, we've recently become a private limited company, but either which way, a private for-profit enterprise.
00:19:09
Speaker
right but ah And yeah, listen, the business model, um is as follows city clubs which is again the broad genre in which we which we develop should in theory make 50 percent of its revenue from the sale of the consumption of food and beverage right so again i'm going to reiterate this a couple of times in our conversation actually we have fundamentally a hospitality business. We've got 550 employees, 195 of them now are in a culinary program right and it's not chef driven, it's a culinary program. So food and beverage ah is a very much part of it. So 50% of your revenue should come from the consumption.
00:19:51
Speaker
that happens within your club. Now you do all this stuff to induce that consumption by creating a great space and giving a bit of a culture. And 50% should come from what we call the dues. Dues are the membership dues that are due. So if you were to take a pie chart of the revenue of a stabilized club,
00:20:12
Speaker
globally This should be ah the pie chart. Obviously, food and beverage has a certain cost associated with it. Membership has a different economic mark associated to it. But it's a model
Expansion Strategy and COVID-19 Impact
00:20:25
Speaker
that works. It's a model that works once you hit a certain inflection point on the number of members.
00:20:30
Speaker
right That is easier said than done. So when I was building an Excel model, or so oh yes, when we get to a thousand members, you know, we will become profitable. but I was right. The road was here to a thousand. And and then I didn't always say, you know, you're the real litmus, the renewal rate, right? I can sell you the dream one time around. but Do you renew year on year? You only renew to see value in what we do. And I think, you know,
00:20:57
Speaker
We're very focused on that and I'm quite pleased on where we are on that trend as well. The different perceived value of paying the subscription, you know, to be part of our community. And, and you know, it keeps us on our toes. We keep working on making sure that the renewal rate stays, you know, above industry average for us. What is the industry average?
00:21:22
Speaker
you know i took I think in the global cluster world you have a you know but for members clubs you have a about a 15 to 20 percent attrition on memberships every year yeah you know so it's an 80 percent renewal 20 percent attrition and you know we're hovering a little bit 19 so you know about your 20 bucks industry yeah I was I think these old clubs have a like a lumpy system, right there's a big upfront lump of payment you do, then the ongoing renewal is fairly low cost.
00:21:58
Speaker
ah Yeah. Yeah. I think that's the India model. Right. And I think, I think actually we also have an upfront fee that is likely more, I would say three to four X the annual fee. Right. Okay. In the old India clubs, I've noticed that um it's like 50. Yeah. Maybe even 50, 80 at some times. Yes. Yes. the big I think the different models, right? So the big country clubs around the world still have initiation fees that go into a couple of hundreds.
00:22:30
Speaker
$100,000, you know, you want to join a fancy golf course in Florida, you know, you want to join Trump's golf course in Florida, I think you need to put $300,000. So I think that also exists in the US, but in this contemporary city club, lifestyle club version in the world, in sort of foreign markets, I'm actually seeing the reverse of what we do, a smaller initiation scene for the two and a half X annual scene. So I think it's market driven to market driven. We have a sort of a you know a sort of one-time fee and then I think it's a it's a 25 percent of that as the annual fee every the year. so yeah So different models I don't think there's any right answer. I will give you club economics 101 though. They say that your initiation fee should in theory add an x number of members pay for your entire investment in your club.
00:23:22
Speaker
Right. Okay. Your annual fee at an X amount of should take six costs of running your cloud. So then the balance revenue that you make, right? Should be just a variable cost. So the food and beverage always had a cost of goods sold. So that should be your margin profit mark put together at an inflection point. This does become a profitable business and a fairly profitable business. Okay. That that's it.
00:23:47
Speaker
You've given me a lot of clarity on the business model. but yeah What is that number at which yeah a you are covering both your fixed cost and how many members? I don't know. There's a there's an exact sign. But I think anywhere between 1,000 to about 1,500 members in that range, the business starts to become very interesting at a unit level.
00:24:14
Speaker
Okay, okay. And what are the membership numbers for Gurgaon, Mumbai, Hyderabad? What's the timeline? Like, ah first let's talk about the timeline. We'll come to this later. So, I think it was around 2015 or so that you were taking up this. ah Just take us through the timeline. Like, how did it start? Listen, in 2014-15, I started to think about it. I i had a but a couple of false starts in terms of the signing part. It's a big amount of capital I needed. I didn't have the money.
00:24:43
Speaker
um So I had a couple of false thoughts on who I would partner with, how would I get the real estate. ah you know um So it took me about two and a half years to figure that out. And I kind of gave up three or four times in that two and a half years because I couldn't, ah couldn't I I was at this very strange um conundrum where I couldn't raise the money till I have them had the real estate. I couldn't lock up the real estate till I had the money.
00:25:12
Speaker
you know, and these developers could smell the fear in my eyes when I'd go meet them, you know, even though I tried to hide it. So, you know, I was stuck in this sort of vicious sort of negative, uh, feedback loop of not being able to close the real estate and as a result of being raised capital and what have you. Uh, but I did manage in 2016 to, to, uh, to get through that first hurdle, uh, with a developer who.
00:25:39
Speaker
had already agreed to become a partner. and we just and So he was not a developer, he was a landowner, it just happened to have a piece of real estate and continues to remain a very large shareholder, a partner and almost like a co-founder to us and a great relationship that we have. So we got lucky you know regard luck because ah you know that can make or break your business. So ah in 2016, we locked up the piece of real estate in 2017. This is in Google.
00:26:04
Speaker
in Gurgaon. It was in go on the Gulf Coast Road and a building called Horizon Centre that had just got built but the Gulf Coast Road hadn't got built and people were like, where are you? you know so you're right Pre-golf was sorted, you took such key minutes from Cyber City to Horizon City. It takes you seven minutes now. So I think you know that infrastructure was still going to develop. Those who were developing it knew what it was going to do. Those who were just observing it had no idea that what this mess was going to become like. I think we were in we just but hoping that it would become something great. But ah you now when you look back, I think we ended up building our first club in probably the best way to see location.
00:26:41
Speaker
in yeah in all of NCR and and probably one of the best buildings in all of India. you know so yeah so So like I said, you know after not being able to find ah a piece of real estate, we ended up at the best. So um you know I look back and perhaps that was some luck, some grit, ah you know, some sort of not giving up, you know, combination of that, that sort of fell into place. But we went into design in 2016. What was that arrangement? Was was it like a revenue chain or a fixed red?
00:27:14
Speaker
No, it was an arms and rental. The gentleman um sort of also gave us the property, also invested, but it was an arms and rental. So yeah, and continues to be a partner it continues to be a very meaningful partner in our business and and yeah and someone who is like I said, it's like ah almost a co-founder with us. yeah so yeah good oh yeah ah but But yeah, you know we we ah we started design in 2016. In 2017, we went into construction. I never built anything in my life before, by the way. So it was a bit of a baptism by fire. In 2018, in June, we opened the Coromant Grog out. So yeah, so, and yeah, you know one or two years
00:27:57
Speaker
struggled, lacked credibility. a ah I may have known a lot of people but going up to them and saying hey give me a couple of lakhs upfront fee, give me a me and you know this will be annual fee and this is what I'm gonna do when the category didn't exist and people like what are you talking about? Why would I pay to come and dine? and you know what is this and where's the swimming pool, where the tennis courts, how can you call this a a club. you know so and and then And then the very legitimate question, will you survive next year? If I pay you this money, are you but ah you know ten twenty we've taken,000 square feet, you know what's wrong with you? By the way,
00:28:36
Speaker
ah Hyderabad is 86,000 square feet and I feel it's too small. So at the time, we sort of suffered rightfully so from a massive credibility gap in the mind of the consumer. And instead of giving up, I think it made us work even harder and deliver great quality programming and ideas and food and beverage and excellent service. And my wife and I were at the club every day. So yeah, it was a tough journey. We lost money for the first two years.
00:29:07
Speaker
And ah many times during the first year, I said, shit, we made a mistake. you know ah We were just not getting that you know you know we we just start hitting that inflection point on growth and we were trying lots of different things and you know hustling a lot and and then boom, COVID happened.
00:29:30
Speaker
And then I said, now we're really dead. Do you want me to carry on to what happened after that? yeah yeah but yeah so but Actually, was said before we come to COVID, ah what worked did you know like how did the first 100 members get signed up? what What worked in terms of the marketing investments that you did?
00:29:51
Speaker
There was, you know, I don't even know what marketing meant or what social media meant. Even as an entrepreneur, you know, as a first time entrepreneur, you're kind of just figuring out and talking to people and making all sorts of mistakes. ah But I think fundamentally the first, we started the club with 100 members, right? So we started the club with 100 members and we grew to about 500 members through COVID. Roughly, I can't remember the exact number, it was around that. But the first 500 were, ah listen, yeah, I,
00:30:20
Speaker
normally you know private members club saying you know please apply we will see whether you know you fit the bills. I was interviewed so I was the one who was being interviewed I watched the other way around. I joked with a couple of my members when I called our founder members you know they would meet me and they were like sorry who are you what are you doing? I had to give them a feel, I had to kind of sell every one of them. I was listening I leveraged my personal relationships i kind of so i i you I told people that I had just had to join and some of them just supported me because they're like this guy has enthusiasm. and he's go you know i don't i think he's mad I don't know what he's gonna do but but slowly listen.
00:31:00
Speaker
I think credibility gets built by delivering, right? It doesn't get built by marketing and credibility ah gets built by delivering day after day after day and consistently trying to deliver the experience. so I think that's really what we focused on doing.
00:31:18
Speaker
and And yeah, so ah you know it was tough the first year. And you know it and when you're gay creating a new category, and by the way, if we have the time to talk about our new business, which is again a new category ah that we're creating, ah you know it takes a little time for customers to understand who you are, what you are, what is the value proposition, and why should they pay for it.
00:31:40
Speaker
and yeah For example, with a lot of SaaS companies, they have like a freemium model where they give you something free at to show you the value and then convert you to a paid subscriber. And this is essentially also a subscription business at the end of the day. well What were some of those um growth hacks which worked for you in terms of like you know it could be something like it would speak that much to bring their friends along for certain events which gives them a taste of it or you know what what was all those things that worked.
00:32:12
Speaker
yeah so listen that's actually yeah so you're you're bang on i think it's to quote bob deadman again you know he said and it's exactly a quote from the he says the members we have we want to keep and and mainly through them get others so uh you know that's the greatest source of members it's a reference ability um so yeah so the events but it's a double-edged sword right you kind of make yourself too for us and you like why should i pay a stitch and i could come anytime right so oh you know so there was a balancing act of how much you do it how not to do it you know and actually I don't know I grew up with a lot of influence my family had a lot of access I think that worked against me because someone told me Delhi is a city where
00:32:59
Speaker
ah they weren't there It's a crab mentality, they want to pull you down. right they don They don't root for you initially, but if you survive their criticism and they're you know their sort of skepticism, then they root for you. But again, it's an inflection point of acceptability. So even the people I knew kind of worked against it, people were like, actually, I became like the talk of town on how this is the worst idea I ever heard, amongst the circles that I was going to go after. But you know,
00:33:30
Speaker
any key that didn't it didn't It didn't bring me down. It actually fired me up even more to prove them wrong. And yeah, I still face some skepticism out there, but you know what? Bring it. I will prove you wrong. I And I'm sorry, you personally proved the idea think wrong that we the key is it do add value to didn't... what we're doing.
00:34:01
Speaker
So Covid hit, you were not five members in Gurgaon by that time. So, you know, I would have to break you, right? We were not breaking you, we were losing money and there were many times during that time, during those first two, three years where I was convinced we had done something wrong. I personally leveraged myself very, very heavily you know Because I didn't have to to to pony up my share of the capital. So I was under a lot of pressure and stress. ah you know We are friends and family who are invested. Some of them are starting to get a bit antsy. So yeah, we're not in a good space. And then you know we will hang to mouth month to month to meet salaries, work in capital, meet our strategy to reduce. And then suddenly, boom, you know you're shut for business. But you still have all these liabilities out there.
00:34:53
Speaker
And actually, I saw the lockdown coming on 16th of March. So 22nd of March, 20th, 20th of the day, India announced the lockdown. I didn't know because it was my birthday, so I know that date in the back of my head. But on the 16th of March, um I knew it was coming because the writing was on the wall. Other countries were shutting down. So I cleaned the club.
00:35:15
Speaker
and took all the food out distributed my stuff and told them all to go home so you know we didn't have anyone stuck getting home or what have you I said just go home figure it out I'll call you when we have something but we're shutting down so we shut on the 16th of March you know a couple of days before ah before in fact I had taken my first holiday on the 8th of March which actually didn't end up being a holiday because you know I said shit we're dead ah you know but When we were about to, so obviously everyone took a massive haircut. there was no bailouts over We didn't know how to reach that. And then coming to June, we realized that we were going to come out of that lockdown. I wrote to all our members, actually, and I said,
00:35:56
Speaker
you Your annual dues are going to be coming up every month depending on when you join over the next year. If you pay us upfront now, I'll give you a 10-15% discount, 100% paid out.
00:36:13
Speaker
I started COVID with a lot of cash. I started reopening with a lot of cash. No restaurant, all my restaurant friends, all my partner, they were all out of cash. There were no bank loans available for our service industry. So we started with a whole bunch of cash. What we did with it is we went super into, we spent some of that money on our protocols, safety, clean the air, what have you.
00:36:38
Speaker
And what I realized coming out of it, there was this revenge demand. yeah People wanted to come here because it was a predictable environment. They knew that we could control the environment a little better than so spaces that were open to the public. So we bounced back really quickly. In fact, people for but that year youre enough schoolboard we went in and locked down a couple of times.
00:36:57
Speaker
ah people would only come to the quorum because they said, you know my parents haven't gone out, I don't want to take them to a public, people worry about elderly, we'll take them to quorum. We did a lot of hacks and put air quality good filters, we put all sorts of stuff into our place and you know we could actually administer social distancing that a lot of people perhaps couldn't. And um so that was one trend that happened. The second trend that happened was people started to realize that, hey, I can work from anywhere. At that third space,
00:37:27
Speaker
relevance became, we are only designed we are always designing ourselves in the third space, but the need for that third space became a apparent to the consumer for Scoville. So that was the second catalyst. And the third catalyst actually happened on 27th of March. On the day we went to lockdown, the India head of black services will be a mentor of mine for many years. We're born in the same day. So I kind of messaged saying, hey, you know, get ready. I said, oh, you know, all the best man, we're getting into this crazy type and.
00:37:59
Speaker
there was another club in Bombay that had gone bankrupt just before that. It was the A club owned by the Yes Bank founder and that's a longer story but I won't get into it. ah You know he had gone to jail and Blackstone and bought the building and repossessed the asset. He stole me on 22nd March to get ready for Bombay. So during COVID I was planning the takeover of the second club when I didn't even know how to fix the first club but you know that's that's good luck and and you know being in the right place at the right time so ah You know, during the various lockdowns, we actually planned Bombay. My wife and I traveled, you know, almost 35 times to Bombay, flights were empty, we stayed at the Four Seasons. I don't even want to tell you what I used to pay for the Four Seasons during that time, you know, and because we're right next to the club. What's the location of the broccoli?
00:38:51
Speaker
It's in Lord Perez, so it's very close to him. And I think April 2022, so you know the last got done with January 2022. And in April 2022, we opened, so this COVID disruption, revenue picked up, membership grew.
00:39:11
Speaker
members had supported us and we went from one to two clubs. So yeah, it was a crazy time. Most people were wondering why Sunday we went from that position to just trying to grow and obviously came with a lot of other growing problems and pains and what have you, but we were still continue to solve them as we grow. But yeah, so COVID was an interesting accelerator for us. And the Mumbai club was also an affixator, not an administrator.
00:39:37
Speaker
You know, I cannot tell you what deal I got in Mumbai club but because it's a special situation, child action, but you know, ah but yeah, it was a, ah yeah, we were just lucky to be at the right place in the right time. Amazing. Amazing. And what's the size of the Mumbai club?
00:39:57
Speaker
Yeah, it at the time when we took it with about 56,000 square feet, it had a, ah you know, for 35 to 40,000 square foot club and about 15, 80,000 square feet of co-working attached to the club. oh Since then, ah as of today, it's now going back to about 85, we increase the co-working over the part of our business in Bombay. Okay. So is the co-working?
00:40:23
Speaker
Like a regular co-working? Is it for members only? or like um doesn't know it's It's not for members. it's so it's cit in nuance First of all, we're a hospitality for our co-working space that's co-located to our club. It's not an individual place.
00:40:40
Speaker
So it's we're very much positioned at a premium. It's for the the lawyers, the bankers, the private equity people. We don't go after the enterprise clients. And because it's co-located to the club, the if you become a talent at our co-working space, you also become or one or two of the people within your senior leadership team become members. So we were bundling the membership with the co-working as a result we were able to position ourselves much higher than everyone else. I think we traded a 40-50% premium on price to any other players in the country but again it's small it's boutique they're not large spaces and they are for long-term rental they're not like a day co-working space. you know so asked yeah It's not a core part of what we do let's say it's an adjacent strategy you know ah one of many that we're going to have actually as we grow our business
00:41:31
Speaker
Actually, I want to just kind of point out here, we've started with the club business. We're a lifestyle hospitality platform now, right? And I'd say, you know, that's really where we are going to add a lot of complimentary adjacencies over the next five, 10 years into our business, oh you know, with this unique flavor of hospitality that is community design, ideas, that, you know, which I don't think anyone else is doing. Okay, interesting.
00:42:00
Speaker
So trouble way to Hyderabad, how did that happen? When did you open? Yeah, so around 20. So yeah, so it's funny. oh Actually, the Hyderabad conversation started free in Mumbai. In 2019, I came to Hyderabad. Again, um it was a Blackstone and Satva joint on property. Our friends in Blackstone introduced us to this idea that, hey, why don't you go and look at our development in Hyderabad?
00:42:28
Speaker
um So we came here in 2019, but then obviously COVID happened and Bombay happened and then so then, you know, sort of we lost tea. and I think once we opened Bombay, we then started to look at Hyderabad and we have two components to Hyderabad. We opened it now.
00:42:44
Speaker
plus What we started discussing at that time and what we started to see is that there's a monetization, hospitality and monetization happening in the office building. And by the way, you know, today it's becoming much and much clearer, but we were talking about this since 2019 that the worlds of hotels and offices are converging.
00:43:04
Speaker
The role of the office building is changing. We, by mistake, had a front-crow view of this because our two clubs were in office buildings. So yeah, in Hyderabad, we came, this developer, Satvara, had the foresight along with Blackstone to build this amenity blocks.
00:43:22
Speaker
They didn't quite know what they were going to do with it so this is why do you have a look at it and, and, um and see what you could do it to it so I said I'll take the top two floors and I'll make a club and then I'll take a k another floor, and I'll make an amenity in meeting and events and collaboration space for the future of work. And they're like what is this going to be and I was like you know it's like, basically, why would you go for conferences.
00:43:43
Speaker
inside a hotel, let's use conference bank building venues inside office building. And um I saw one player globally doing it and we're doing quite well, but only one player. And I shouldn't listen. I feel like this is the future of where the office building is going to go. And that was the birth of our brand called District 1 Thursday.
District 150 Concept and Scalability
00:44:01
Speaker
And yeah, you know they supported us. they ah you know ah They supported this idea. And they also thought it was a good idea because they had built this amenity block. They didn't know what to do with it. I had this crazy idea to do it. So you know I was fortunate enough to have this support.
00:44:17
Speaker
and we built district 150. We're about six to ten months into that. and I'm very, very excited about what we're going to do with district 150. I think it's a very big idea. I don't think anyone really even understands what we've done, but I i now like that. I like being a little lonely. There's a little bit of pain you go to when you do that. And I'll tell you where we got this from. We had built a small banquet room in Korem Gurgaon with about 2,000 square feet, but same in Bombay.
00:44:45
Speaker
And we were doing a disproportionate amount of our revenue from that. And I felt like people didn't want a lot of hotels anymore, right? There was no differentiation. You had these typered halls and sari carpets and chandeliers. There was no like lifestyle. There was no high-quality service. You had this empty hall that was a pre-function space that nine or 10 times had bad exhaust and cement of fried food. This is the experience of all hotels. And so I felt like there was a gap.
00:45:13
Speaker
And I thought from even from an urban planning perspective, it was most sustainable to have, these office buildings are empty at night, they have plenty of parking, you know, wide creating, really safe. and and And yeah, District 150 was an idea that was born two years ago. We opened about eight, 10 months ago now and we're super excited about this brand and what it's gonna do. it It's a much more scalable ah sort of pivot for us as well. You know, come business by definition,
00:45:39
Speaker
and I think we can only build five, six, seven in the country, but I think this is about sticking to all of that and has the same DNA of what we do. you know So it's not it's not some sort of massive deviation of of capability that we're building. Amazing. Before I come to digging deeper on district 50,
00:45:58
Speaker
How much time did it take you to get 500 in Mumbai? Like in Gurga, it took you about two plus hours to get 500. So Mumbai was a bit strange. A, we inherited the first world club that went bankrupt. So we we we stepped in the shoes of that obligations, we inherited that. We also opened right after COVID. So Bombay has been a little bit of a mixed bag, also to the location. But ah I'd give you hype about maybe a more ah more relevant you know in a normal, you know like for like environment. It took us
00:46:34
Speaker
From the day of opening, so while we sold some early members to 500, from the day of opening to 500, including the early members, is about two and a half years in Hyderabad is four months. Wow, amazing. Basically, you perfected that playbook, plus the credibility was already there. I don't think we perfected the playbook. I think we're still learning on that. I think the credibility gap could got, ah you know, so I think ah i the playbook is we're not perfected it, no winner. I think we've got a long way to go and we're still learning on that one. But I think what we did is by building free and you know I don't think people were doubting whether we are going to survive tomorrow or whether we'll exist tomorrow. so but ah And and and but it's not a tell me world, then something became a show me world. I'd say go and see what we're doing here. I don't need to yeah it tell you that I will do this, you know which I had to do in the initial club.
00:47:34
Speaker
Amazing. What is the number of members now for each of these? go um way had So I think on a collective basis, we have about 3,000 strong member base. If you include partners, which are spouses on either side of the ah of the orientation, ah you know who are full members in their own right as well, because that's kind of how our silent membership works, we're 5,000 strong today. Okay.
00:47:59
Speaker
The feast is the same whether you are single or you're married, like the spouse is free. Or is there a separate subscription feast? No, so we have many, many tiers of memberships. So the standard membership is for for you and your partner. um So I don't want to trade free because it's not an add-on, they're equal focus for us. right ah So let's say it's ah it's a two for one deal, for lack of a better word, I don't want to call it free. And then we have many, many different categories of expat under 30, under 35. We have a women-only membership, we don't have a men-only membership. We're very, very focused on getting the right gender balance.
00:48:36
Speaker
in our club, we've got a corporate membership, we've got a loud station membership. So different varies of fee. I think our fees also vary from city to city because certain cities have much larger facilities like Hyderabad. I think over time it will start to kind of normalize, but right now we have a few sort of different fee structures across different cities and different categories as well.
00:49:03
Speaker
What will be this year's revenue overall for the district 150 ballpark number? No, we're a private company. Actually, we don't share that detail, but it's...
00:49:19
Speaker
it's Let's just say it's it's a significant number of revenue and a significant number of profits. And we're casting a positive So yeah we don't we don't share on our numbers yet. Two digit crores? Three three digit crores. I mean in the three digit crores. So and of and let's talk about district 150 now.
00:49:48
Speaker
ah So this is essentially like a B2B offering. This would be for corporates who want to do it. No, no. So there are three components to it. So I'll tell you. So let me step back for a minute. I'll tell you what we saw. There's a trillion dollars of commercial registered assets globally that is lying almost empty.
00:50:15
Speaker
Okay, people are open back to work. Now in India, you know, we're still, you know, hurting the cattle back to work because, you know, we're giving them a done down coming there. And I think it's a question of time and it start with certain industries first and then to others where I think remote hybrid, ah sort of more flex in work environments is going to be the next, ah you know, and it's not gonna happen overnight, it's gonna happen. But I think there's a structural gear shift that's happening. That's right.
00:50:42
Speaker
What we realize is that the role of the office building is changing. um In this new environment, attracting talent, ah managing attrition, retaining talent is becoming a a massive sort of focus. It always has been. It's become an increased focus. i think but So we said, of okay, how do we build a great environment within an office building that kind of takes some, if not all of these boxes. So that was very much to original thesis. So the first says, we say, listen, if a workforce is distributed, you know they need to come together every now and then. ah right So you need meeting events and collaboration spaces. So the three segments of the market that we cater to, the B2B, which is actually correct, the corporate segment, the conferences, the meetings, the town halls, the hackathons, what have. Then I have a B2B to C segment.
00:51:39
Speaker
Right? Which is basically social yeah events. So again, actually with design, we said APNIS must transform for work, social and culture. ill complete short one and So for social birthday parties, you know, celebrations,
00:51:57
Speaker
wedding. I haven't had a wedding yet in the district 150 but I will have a wedding and I told my friends at Blackstone that the day I have a wedding in an office building where I have a you know groom riding up on a horse, please I'm going to send you a photograph, please share that with Mr. Stephen Schwartzman who will retort what an office building is. It's a matter of time. I promise you I am going to do that. oh well I'm going to make sure that someone gets married at the district 150.
00:52:22
Speaker
oh So yeah, so B2B2C, now why I call that the B2B2C? Because you know, you work with a lot of event planners and what have you. And over time you have a B2B platform B2C strategy within that segment of social. Then we said, hey, culture, right? Consumption of culture, we moved towards an experienced economy. So Mara just went and bought, you know, Paytm and ticketing business. They're launching something called a district funny enough. They haven't announced it yet. So if you read it here, you know, i I'm aware that Segi is also planning to do ah something around the experience economy. And why are they doing that, right? Because they're seeing that consumption of culture is an evolution of, of of you know, where we're heading. So we've been seeing this seminary, because we've been programming our place with all sorts of culture. So we said, where is the consumption? There's no venues for that. So can our venue also live for
00:53:14
Speaker
you know comedy shows, music events, all sorts of experiences, pop-ups and you know life cooking clashes and you know painting clashes and what have you. But the space has to be appropriate for that. So we designed our space for old free segments. What we also then realized is that the landowner or the commercial developer property, which by the way, luckily to Russia, 75, I would say 85% of office buildings are owned by institutional clients, so owned by individual developers, whether it's Blackstone, Brookfield, Zander, Tata, whatever, they're all institutional cabins, GIC, whatever, they're all in the office order today, right?
00:53:53
Speaker
um or in India. So then what we realize is that with consumption culture we could create spaces that could be created for the consumption culture. could ah We could really engage this place with really interesting stuff that's happening ah all the time. The landlords could go to the HR and say hey we've got this fun stuff happening it's not only for you it's for everyone but we've got this happening and the HR is saying fighting this retention accretion problem can create a better work environment without the headache of doing it. So you know they might think 10-15% more. So I think we've created this business that did a symbbitic and sort of features all of them. So here are the three segments. Create food and beverage. We've partnered with Sepco. We have a great coffee experience in iDisha 150. We're doing a wine bar now.
00:54:37
Speaker
um you know soing for a little but our li license to come so but We're do a wine bar. We have a fantastic new restaurant called Shilla, which is a homegrown brand that's modern Indian cuisine. So there's lifestyle, young, hip, cultural sort of space, B2C celebration space, B2B corporate space. And they all coexist at the Ship150. But please come and see it. it's It's very unique. We're very excited about it. And I think every And it is purpose built for the office building of tomorrow. I'm not going to do a district 150 in a standard location. It is purpose built for the office building of tomorrow because we think the role of their office building tomorrow is changing. What is the science of district 150 in Hyderabad?
00:55:19
Speaker
ah It's 26,000 square feet. And I was assuming these restaurants would be open to not members as well. And it's open to everyone. District 150 is open to everyone. And and basically, actually by creating the amenity stack, we keep adding a wellness to it. A developer can say, hey, in that micro market we need for the gym, we'll add two.
00:55:41
Speaker
We're creating the amenity stack for the office building of tomorrow, right? And putting it under a consolidated sort of piece of really set approach to it distributed, you know, it's the happy restaurant, we're putting it all together. So it's more efficient as well for a developer, but consumer as well. So. oh And the thesis would be that an office building, which has a district by 15.
00:56:09
Speaker
would get a slightly better rental yield. Absolutely, not would is. Okay. Number one. illegal And number two, the thesis is we're so much more creative and inspiring a place than a upscale hotel. Okay. So why would you, I think this is, and with our hospitality, which I think stands shoulder to shoulder, if not better than them, you would do, you you would choose us as a venue to have your events here. So I think there's a gap in the market, right? The venue business is, is, you know, we're trying to disrupt the venue business ah in a new ah avatar, within a new construct of an asset class.
00:56:52
Speaker
um Amazing. And like you said, this is extremely scalable. There will be like, maybe potential of 100 districts in India. Well, I don't know. I actually, hundreds of big number. Actually, you know, we're at the end of the day, you know, these things are service businesses, you know, service business by definition, I to scale, I mean, it's people dependent.
00:57:13
Speaker
So you know if I don't think I'll survive if I did 100, but I think it's super scalable. I think we want to be in the best graded buildings in the country. I think it's scalable outside of the country. I think it's a global it's a global brand. I really feel it's a global brand. And I don't want to kind of add one more thing. Quorum means the minimum amount of people are required to make a decision.
00:57:35
Speaker
district 150 is basically borrowed from this very famous anthropologist called Robin Dunbar and Dunbar sort of has a theory that you can only he studied but the the brain of the homo sapien and he said that we can only have 150 table meaningful relationships. So tribes start to disintegrate after 150. And you know in the evolution of society, law and order, religion, all these social constructs came so that this disintegration never happened. But if you strip all of it out, 150 is the maximum amount of collaboration. So one's minimum, a little bit more and exclusive, one's the maximum. So that's kind of how the brands come together as well. Amazing.
00:58:26
Speaker
what You know, like you said, service business is very hard to scale. ah Do you have some sort of a playbook of scaling quality? Like, that sounds extremely difficult. There is not something which, I mean, say like, you know, where you could say Zomato is also in the service business, but for them, you're all there.
00:58:46
Speaker
through that app, people know what they need to do, whether it's a restaurant or the like, so on. There is a certain consistent experience throughout the country that you get with Zomato that has been their playbook. What is your playbook? Because you're in a very different league in terms of the high-touch service delivery that you need to do. So how are you doing?
00:59:10
Speaker
yeah Listen, Zomata is on the commodity side of the service business where they're delivering what a restaurant is making, which is probably you know the more creative and artistic part of what they do. um So I think probably a bad example of schma from a comparison perspective. ah Listen, I don't know what the hack is. All I know is it's stuff. And I think you can adapt some of the other technologies that we're doing ah you know with AI, we're doing something very interesting and try to create some muscle memory ah of who our members are, how they're using the cloud to be able to communicate to them more effectively and to create institutional memory where if people come and go, the memories remain. So I think there's a little bit of a hack there.
00:59:58
Speaker
But I think fundamentally, ah service businesses are tough to steer. How do you attract talent? How do you retain them? um you know ah When the industry is growing, so there's a fight for talent, I think part of it is building a good culture. Part of it is doing something interesting that attracts people. Part of it is your brand getting a little bit more credible.
01:00:23
Speaker
There's no straight answer. It's not easy. I spend a disproportionate amount of my time on people and I think I'll continue to do that as I build this business. I don't think there's any getting made so much. Every entrepreneur I speak to in the hospitality business echoes the same thing. So it's not it's not you know specific to us. and it's it's ah It's tough. It's tough to manage.
Advice for Aspiring Entrepreneurs and Culinary Innovation
01:00:47
Speaker
ah what's the and What's the approach to us people? Is it someone who's got a few basics in them and then drain them or find people who have the industry experience. like how do you How do you build your team? Listen, I think you have to have a training engine. You have to have a training engine in your organization ah across all departments. ah you know Bring young people, bring people. I think you know we in India,
01:01:15
Speaker
I'm not from a hospitality stage. I entered from you know the outside of the industry. So I have sometimes a fresher perspective or ability to do some first physical thinking in people. um you know I think we overstaffed. So maybe you know staff less pay more. Maybe that's part of the solution. We haven't done it yet. We've been thinking about it. um you know Empower more people ah you know and change the pay grade.
01:01:42
Speaker
um you know ah know employee prescribed for bases were super overstuffed as an industry in India, you know, when compared to other parts of the world, right? um There's a lot of middle management and layers that get filled in and you know, managers with jackets who actually, I think it was, you know, Mr. Nakulan and one of the strollers, I'm forgetting who said this and restored to me and I quoted, he said that, you know, the minute we give you jackets, you don't remove your arms because you get straight jacketed.
01:02:13
Speaker
giving orders. I think part of it is culture as well. My wife and I actually, when we're at our clubs, we actually clear tables ourselves as founders. It doesn't matter. like To me, I get on the ladder, I fix lights. ah you know I actually enjoy that part of it. so i want to I think by doing it, I want to prove to culture that there's dignity in every part of what we do and everyone should be doing everything. But it's tough to, you know we're trying it. It's not easy to filter down into um into that. I think that's one part of it. I think know the more cliche parties are true but cliche what everyone does is you know have a fair and equitable culture within your organization but people are treated well, are treated with respect ah you know again either said than done but you know as founders we try and do that but but yeah I don't think any specific action is silly over and above this and I think everyone's trying to do that in their in their own I don't think we're doing anything unique or different here. What do you look forward to?
01:03:11
Speaker
Yeah. So I actually, I don't have it anymore. I'd be honest with you at a personal level. oh I mean, the kind of direct reporting that high to me are more at a corporate level, but I was told by.
01:03:26
Speaker
by an entrepreneur, a tech entrepreneur who is in the hospitality, so he's a member of that. He's talking something quite interesting. He said that i I do a psychometric IQ test of everyone in my organization, even the housekeeping person, right? He's saying you just never know where talent is, right? And the way curiosity and interest is. So, ah we you know, it's something that we're looking to do as well in our and our in our hiring issue. But that's the way existing clients,
01:03:55
Speaker
yeah you know When you're hiring people, you just never know. It's like a box of chocolate. Sometimes you show get good, sometimes you get great, sometimes you get not so good. you know um But i think I think as an organization, if you are able to put the right system in places to to to train people, to help them improve themselves, to be able to objectively ah assess them on a regular basis, to give them that feedback. And then, you know, in like any organization, you know ah you know, change, you know, what's what's not working and add to what's, you know, you just got to remain number. But, ah but yeah, I think, you know, this continues to remain a focus, as we look to scale up, business will will continue to be a focus here for us.
01:04:41
Speaker
You know, and a lot of young people, most instinctive business ideas to open a restaurant, open a sack, something in hospitality. Would you want to share any advice for young listeners of this podcast who one day dream of being a hospitality the entrepreneur?
01:05:02
Speaker
yeah so Listen, ah the world over hospitality has the lowest barriers of entry. It requires capital, but not a lot of capital. So if you want to open a restaurant, I think you've got to be passionate about what you do. You've got to be passionate about looking after people. I read this fantastic book called Unreasonable Hospitality. It's the story of 11 Madison Park, one of the world's best restaurants. In fact, I made my entire team read it and If you're getting into hospitality, you should read it too as well. I think you've got ah the intent has to be there. You want to go the extra mile to to want to to look after people and please keep well and make sure they're well looked after. If you don't have that insight, you shouldn't be doing it you're doing it for the wrong reasons. I think you've got to get the food and beverage right. I think you've got to be maniacal about that and every touch point around that. ah
01:05:50
Speaker
I did an interesting statistic actually one of our shareholders who was the chairman of Yum Brands in India and and set up that entire franchise in South Asia actually said that global average 53% of the time people go back to a dining machine for ambience and I'll come back to what ambience is 30% of the time they go back for the quality of the food and 17% of the time they go back to value right this is a global average across all segments of dining out right now ambience is how you feel When you walk into a place, it's got to do with the lighting, the sound, the service, that quality of how you get greeted to the quality of how the arrival experience, to the way the waiter comes and enthusiastically sells you and tells you and explains you what you're doing. So 53 to the sound volume, to the lighting appropriate, to the smell in the restaurants, you can't pinpoint it, it's how you see. 53% of the time you go back for how you were set, right? Okay. 30% is the qualitative taste.
01:06:49
Speaker
Yeah. And then 70% value. I always tell my team, let's focus on 83, but we're not worrying about 70. You get the AC, right? You can charge whatever you want to. Right. So I think that speaks to, yeah. Yeah. I think you you want to do it. But managing people.
01:07:03
Speaker
And it's tough. Kitchens are tough. My wife looks after our county department. condition look My kitchen staff is inside a room without any windows in a heated environment. and you know How do you get them motivated and excited ah to do it every day? and ah you know It's a tough business, right? so um And you know, but people may want to get into hospitality entrepreneurship, just be mindful. I'll tell you another interesting thing actually is that IHM, which is a hospitality management school that has seven or eight outlets between all all of them, ah they have 14 or 13,000 seats available. ah This last year they had only 5,000 applicants.
01:07:47
Speaker
right So here in a country of billions or unemployment is right and here you have the hospitality. issue I think the youngsters don't want to get into hospitality as well. So you know our industry faces, ah you know they don't want the hard work, they're all watching Shark Tank, they all want to become tech entrepreneur entrepreneurs. you know so I don't know. So it compounds this people problem which is which is which has going to continue to you know sort of hound us. So be ready to solve that if you want to get into this business or be ready to think differently around that. If you want to get into this business, that would be my advice.
01:08:24
Speaker
So how does your culinary institute work? ah You said you have an in-house culinary institute. Well, not in the institute. We have a culinary program. And why a culinary program? It's not chef dependent. We're looking to build yeah a fantastic sort of team of chefs that, you know, there's a lot of cross-training and cross-learning across all our three cities.
01:08:44
Speaker
ah And you know there's a lot of identification of new talent across the board you know and and making sure that this new talent ah you know gets an opportunity to be innovative, create new stuff, and add value. So I think it's a culinary program now. Everyone tells me, hey, your chef's great. I said no.
01:09:04
Speaker
our culinary program is is great. So I'm trying to make it one person, in not dependent on one person per se, but the entire team. So it's not an institute per se. It's a kind of a philosophy of creating a culinary program as opposed to you know just hiring a great chef. And I think a lot of people don't understand that difference. It's not even a nuance difference. It's a fundamental different way in which and which would I give you another interesting statistic. I spoke to are friends at one of the top schools of culinary in the country. And the chefs are not joining hotels there, you know, so there's this massive dissocation happening in our industry, ah because hotels no longer are regarded as great culinary sort of thing, you know, they do banqueting and they do breakfast, you know, when's the last time you went from meal to a hotel, you know, so, and and you know, these things will change. But so there's a lot of dissocation happening as some of it plays to our advantage, some of it sort of
01:10:02
Speaker
troubles us, but there is sophistication happening in the industry. and Essentially, the culinary program is like bringing in standardization. You will be creating standard processes. So that's that that's one-on-one that everyone does that, right? So I think it's more about innovation. It's more about, ah you know, actually the exact opposite. It's about creating new experiences around food and beverage experimentation, staying up the trends, you know, trying to encourage all our people to
01:10:34
Speaker
you know tag and follow what's happening globally within the food and beverage industry and really kind of you know use their creativity ah to to continue to remain and want to do stuff ahead of the curve. in terms of fit And then obviously the basics are there to make sure that whatever you do, you're doing a consistent manner. right So whether it's the costing or the procurement or making sure that you know oh you know, one dish is the same in Bombay or to Gurgaon to Hyderabad or from day to day, you know, that's, that's super important as well in our, in our industry. So getting that balance right is what we're focused on. but ah Do you think we could end with a walkthrough? Can you like carry your laptop or i just give a quick tour? Is that feasible? but Yeah, I can try. But I'm sitting in our cabin. So this is a study lounge, which
01:11:28
Speaker
gets used by members for meetings and events during the daytime. We have a lot of our conversations here. We have a couple of more meeting rooms that are flanking this. We have a beautiful bar. People can come and work here and open up their laptops. Absolutely. We have an art gallery that wraps around this bar as well. We've got some great pieces of photography here. These are some of the greatest artists in India that in their workshops, we commissioned their photographer for this piece. Let me just see. We have a library here. I'm not sure whether you can see it. Yes. We have a library here. Can you see that? Yes. Each of our members donate a book, actually. And then I'll show you the piece, the resistance of our library. We touched this door and it opened into a secret anti-chamber.
01:12:25
Speaker
i So listen, the club is the club is a home away from home. It's a place of work. It's globally inspired from a design perspective. I think it's unique that it's, you know, it has different little looks and corners. And yeah, so this is one of the floors of our club. I'll show you one last piece before I won't take you. It's it's almost 100,000 square feet. So it would take me forever to show you around. But so this is the yard gallery that sort of goes around. And then this is an interesting piece of
01:12:57
Speaker
art that we got commissioned. It's a light one. It's a stairway that goes up to the top floor. But this this little piece of art was inspired by the concept of murmuration. Murmuration is when birds, the starlings, come together in and fly in formation. It's said that theyre they're exchanging ideas and collaborating. And this is a play on our members coming together in our places.
01:13:23
Speaker
talented artists and con methods for us. So but yeah, you you want one more? Should I take you for a one second more round? Who's the creative brain behind all of the art? bar my Well, it's the art. It's the look and feel. My wife and I both are very much involved in the design, but my wife's got a great eye and she drives that. This is our outdoor space with a pool.
01:13:51
Speaker
um and gocebo and this is our main member area um mean members are the bard this is a bar Thank you so much for your time Vivek and for helping me understand the business and also the the sneak peek at the experience of it.