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Taking the road less travelled | Dr. Ritesh Mallik @ Innova8
250 Plays4 years ago
“There are always two roads which will emerge for an entrepreneur, and you have to take the one less travelled.” – Dr Ritesh Malik
Our guest today is a person who has donned many hats – an entrepreneur, an investor, a public speaker, and a doctor.
In a candid conversation with Akshay Datt, Dr Ritesh Malik, Founder, Innov8 Coworking, takes us through his amazing journey. Hailing from a family of doctors, his career was pre-decided. He studied medicine and started practising as a surgeon at Sir Gangaram Hospital in Delhi.
It was in 2012, he decided to quit his medical profession and took the less travelled entrepreneurial route and ventured into an augmented reality start-up AdStuck as its co-founder, an experience that made him learn the art of entrepreneurship in a hard way.
He also founded Guerrilla Ventures, an angel fund, in 2013, with an aim to create a self-sustaining ecosystem of entrepreneurs and has backed 70+ start-ups to date.
Irked by the office conditions in India, Ritesh came up with an idea of coworking spaces and started Innov8 Coworking in January 2016. Soon after the launch, Innov8 was selected by Silicon Valley incubator Y Combinator, where he was guided to expand to larger campuses. This attracted investors and since then Innov8 has expanded to 42 campuses across 8 major cities in India.
Tune in to this episode to hear this medicine professional turned entrepreneur and angel investor speak about how Innov8 Coworking is transforming the office going experience in India.
What you must not miss!
- A great product is everything.
- Treat consumers like God.
- The power of community.
- Acquisition by OYO Rooms.
- What he looks for in a venture as an investor.
Recommended
Transcript
Introduction and Repeated Phrase
00:00:00
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Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour.
From Medicine to Entrepreneurship
00:00:30
Speaker
It is the dream of every parent to see their child become a doctor. And like many middle class kids, Dr. Ritesh Malik followed his parents dream to become a practicing doctor. But a couple of years in, he realized that there was something that excited him even more than being a doctor. And that was being an entrepreneur.
00:00:50
Speaker
Akshay Dutt has a fascinating conversation with Dr. Ritesh Malik about his journey, starting with becoming a better public speaker to becoming an entrepreneur when he started Innovate, getting accepted into Y Combinator and finally getting bought out by OYORooms in one of the very very few stories of an Indian startup giving actual cash returns to its investors. Listen on to learn how he did it all.
00:01:16
Speaker
India has a disease called APS, which is called the Asian parent syndrome, where in countries like India, China, and also the Southeast Asian countries, our parents to this is the only part of the globe where we have a tradition of large scale in multi century family businesses.
00:01:37
Speaker
So we realize that the reason is that our parents, so this is also called the kangaroo parenting where our parents want us to be safe. So they want us to do a profession which is in their blood, which they have worked very hard to learn so that it stays in the family and
00:01:57
Speaker
there is compounding. So this is true compounding in India, the fact that at knowledge of my grandfather compounds with knowledge of my dad compounds with knowledge of what I learn.
Breaking Away from Traditional Expectations
00:02:10
Speaker
And all of this becomes a legacy. So because of that, I have 37 doctors in the family. And and because of that, I didn't ever want it to be a doctor. But
00:02:21
Speaker
I joined Punjabi family and they said that you have to become a doctor if you don't. One day I came back with the idea of actually not taking PCMB, which was physics, chemistry, math and bio. And they said that if you do not take this, then what will you do for what have your has your father worked so hard to actually build his clinic and and the small health care setup? Who will run that? So I said that that is his job. He can sell the business if he wants, but I do not want to run that.
00:02:51
Speaker
And then finally, I think, seven years before this, seven, eight years back, I was working at Gangaram Hospital in Delhi. And one day I realised that this is just a vicious cycle. My parents first said that just take PCMB in 12th and then we'll not force you to become a doctor. Then they said, just become a doctor, just get MBBS, then we'll not force you to do anything else.
00:03:19
Speaker
Then my parents said that just do an MD and then so it's a vicious cycle. So one day I realized the God's action plan and I just quit and I said, I cannot do this. I, I became a doctor. That's it. Now I want to become an entrepreneur. So my mom asked that, what will you do? You do not know anything. Neither do you have a business background. Neither do we have a business background. How will you, how will you learn? So I said that the best thing to do everything is to first remove your comfort zone.
Financial Education and Risk-Taking
00:03:49
Speaker
Get out of that. Quit your job. Quit your profession. You can't dabble with your feet into boats.
00:03:57
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So my whole idea behind doing entrepreneurial ventures was the fact that first I would be completely focused. I will not become a doctor and I will burn my bridge because people don't burn their bridges. What they do is they will do part-time MD. They will they will work eight hours here eight hours there. It needs entrepreneurship is hard like it needs 18 hours continuous dedicated focus across years to become successful.
00:04:23
Speaker
And in spite of all of that, out of 100, only 95 companies close. So only five companies actually win the entire show. So my whole thesis was that I told my mother, and this I told in colloquial Hindi, I said, I'll sell a common snack. The idea is I do not want to do because you died in India.
00:04:49
Speaker
99% of people are dying every day, a slow death by a poison called corporate jobs. People do engineering and post-engineering. They do an MBA in finance, which have completely different altitudes. So the whole idea is, why would you waste your job? And I have no idea why these large corporate banks want an engineer who has done
00:05:16
Speaker
an MBA in finance, it's like this is the worst combination you can look for. And earlier people thought that this was the path to success. But lately with the debacle of banks like Lehman Brothers, etc, people have realized that it's basically fundamentally one thing which has actually made our nation extremely weak is our education system.
Valuing Teachers vs. Entrepreneurs
00:05:41
Speaker
That is our fundamental challenge to
00:05:44
Speaker
key areas which are truly important for the country are health care and education. And unfortunately, we have not done a good job in both of them today. So I go to a lot of schools, colleges, and I ask as young students, I ask them when they are in six or seven, and I asked us how many of you want to become a teacher, not even a single hand goes up. The idea is that no one wants to become a teacher.
00:06:09
Speaker
Everyone wants to become an entrepreneur or everyone wants to become a CA, a doctor because we don't respect teachers. We don't give them enough salaries. Of the bottom of the pyramid, you will find teachers who are not paid well. So in my opinion, changing that is extremely important. And I was a victim of Asian parent syndrome.
00:06:29
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And I realized that that was not my calling, took a call and took the hard decision.
Motivations for Entrepreneurship
00:06:33
Speaker
And the whole idea is you need to work your ass. Tell me about that period of 2012 when you were a surgeon at Gangaram. I imagine you must have been earning very well. So did you see startups around you at that time and then got inspired? Or was it that you got burnt out at Gangaram?
00:06:51
Speaker
I didn't, I wasn't paid well, I was doing doing my junior, so it wasn't, it was an internship, sort of a job, extremely, extremely boring. And the worst. So I always my dad, dad asks, or he asked me back then, that why don't you like medicine?
00:07:11
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I said that I just asked him that why aren't you a dinosaur or why aren't you a say say a giraffe because your genes are different from them right the same way my genes are different in terms of my areas of passion so my brain print is different my thought process is as follows I don't want to become a doctor because I know how
00:07:37
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50 years of my professional life would look like. I know how much I would earn when I'm 25, how much I would earn when I'm 35, and plus minus 5% that is where my median will stand. I know what I will be doing. As an entrepreneur, I have actually taken a ship. I'm the captain of the ship, and I don't know. I might become a Columbus who discovers America and creates the most important historic achievement of that century.
00:08:06
Speaker
Who were the people you were inspired by around that time? You've seen the doctor role model in your family only, but did you have an entrepreneurial role model on the other side, which made you feel that that is more to my... I was deeply inspired by Dhirubhai Ambani.
00:08:27
Speaker
When I saw his story, it was deeply inspiring. At the same time, I was deeply inspired by, at that point in time, Shantanu from EduComp, because EduComp was a rising ink startup back then. Jaya, the edtech pioneer.
00:08:47
Speaker
Yeah, but but but they've been disrupted significantly. But back then there were a lot of I was deeply inspired by sort of sort of miracle co founder of India Bulls. And I realized that all these people had one thing in common and that was that they left their comfort zone.
00:09:02
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nothing great will ever be achieved. And the problem is, people think that taking a risk is wrong. I believe that taking the risk is the only is the is the safest risk that you can take. So this is very interesting.
Innovate and Project Gorilla
00:09:15
Speaker
When people ask me while investing, that why do you invest in startups which are extremely risky? Why do you invest in public markets? Why? Why? Why not do an FT? So I always tell them that, actually,
00:09:27
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People are not educated enough because of our education system. We should be taught personal finance. The most important skill in this world is personal finance. We suck at personal finance. No one knows what a balance sheet is. These are basic things. This is like Kirk Herger. This is like ABCDE. Now, they don't realize if I have 100 rupees in my pocket in 2020,
00:09:52
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Because of inflation, this will only go down to 16 rupees in 2030 if I do not invest. If I keep it in a bank, this will become 40 rupees. Now 100 gets depreciated to 40 though it will look like almost 200 rupees after 10 years, but it is actual value is only 40 rupees. So money is currency. Why is it called currency is because it is current. It is a live buyer. It is very subjective. It's very perspective led.
00:10:19
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So so so if I invest in a mutual fund, 100 rupees would become, say, eighty nine ninety. But if I invest very wisely, carefully, I can make that 100 rupees into, say, 150 or 200 rupees is taking calculative bets, calculative risks and not gambling. There's a fine difference between gambling and taking calculative bets. Gambling is out of 100. You have one chance to chance to win.
00:10:47
Speaker
But calculative risks out of 100, you have 94 chances of winning and six chances are things like earthquake and the force major that can happen like covid. So so in my opinion, taking calculative risks is the most important attribute which we are we are missing. And also, I just want to add here, just imagine our education system for the whole life teaches us to take the safest route.
00:11:12
Speaker
They will tell you the safest route always. They will never tell you the route which is wild, which is... And as that beautiful poet said, he said that two roads emerged in the woods and I took the one less travel and that has made all the difference. I think that is so important. Mr. Frost said it beautifully. Okay. So 2012-13, you were at Gangaram and frustrated and you decided to burn your bridges. So you quit Gangaram and then what did you do?
00:11:41
Speaker
So I joined a French startup called Adstock. And I personally learned a lot from Abhishek. He's from IIT Chennai, extremely focused technology entrepreneur. And we were building a lot of augmented reality products. And that was my first exposure to technology. And I started working with him. I became a co-founder and started building the entire
00:12:08
Speaker
product along with him. And even to date, I do not know coding and all, but started learning in how to sell the product digitally. So I realized that four skills I needed to know if I wanted to excel at entrepreneurship. The first one was public speaking. The second one was coherent thinking and thinking and design systems. The third one was digital sales.
00:12:33
Speaker
And the fourth one was managing finances. These four things are so critical. The reason I'll tell you, I meet so many great entrepreneurs with amazing products, but they failed because either of these four skills are missing. Until and unless you are able to sell digitally and people didn't
00:12:55
Speaker
knew about that back then. So back in 2012, 2013, first I made it a point, I started learning all ad work, managing management of camps, SEO, SEM. Tell me about the product first, like before you come to how you were selling, like what was it that you were selling? So we had built an augmented reality app called Ariel. So basically it was very fancy. But for example, this is a newspaper and you have an image on it.
00:13:24
Speaker
So the moment you take our app on top of that image, it will directly link you with the news, active news of that image. So that went pretty viral. We got two and a half lakh downloads back then. And when almost 75% of our population was on the 2G,
00:13:44
Speaker
So that was a very interesting exposure for us. We built a great product, which was eventually built, operated and transferred to Times of India, which eventually became a live app.
00:13:56
Speaker
Okay. Yeah. I remember a live app. Yeah. For one or two years, they promoted it a lot. Yeah. Okay. Okay. Okay. And your role was to drive downloads, like app downloads. Downloads plus plus plus ensure that there is enough cash in the company to ensure that we have sufficient runway to ensure that we build the entire built operate transfer modules and post
00:14:24
Speaker
post the time stint, I had moved on from the company. Okay, like once time times of India bought into it, they like bought into it or what? So, it was a BOT, it was a built operator and transfer. So, they paid us and... For the technology only? Yes.
00:14:47
Speaker
Okay. Okay. Okay. And so like this was like how long this thing that you did here. So this was why I was doing the hospital. I always wanted to start.
00:15:01
Speaker
I wanted to quit my medicine but that wasn't allowed so I finished that but while doing that I gave almost everything into this and post that it started in 2013 I started exploring a lot of interesting things and then I got some time so I started it didn't make a lot of money with the
00:15:23
Speaker
times deal, but Learned a lot and also got some confidence and also got some credible support from the family that at least something has happened You you had proved to showcase entrepreneurship say yeah After doing all of that my focus was that I have some capital now what to do So I thought that how do we generate more entrepreneurs like Ritesh Malik in the country?
00:15:51
Speaker
There must be so many more people who have no business background, who have no background of an IIT or an IIM, who don't even have
00:16:01
Speaker
an engineering degree. So for that matter, how do we inculcate these entrepreneurs? So we build something called Project Gorilla. We said that let's build a small fund to invest into founders, back amazing founders and back with your own capital. This is a very important term. Back with your own capital. Don't raise capital to fund into entrepreneurship because when you have your own capital, you have an infinite long period of holding. You can hold into a company for 15 years.
00:16:31
Speaker
The moment I take capital from you, you will be consistently asking me what's the performance of the entrepreneur. I will be consistently hammering the entrepreneur that we are passionate about this.
00:16:42
Speaker
So our focus was completely focused on backing great ethical entrepreneurs who are solving large challenges may or may not become successful. We don't. So our take was we will not drive the revolutions of a tech, the ups and downs of people drive on core fundamental products. And we started backing in some very interesting entrepreneurs way back in 2014.
00:17:07
Speaker
Okay. V means like you had some other people who were also invested with you. A lot of like-minded entrepreneurs who had at some capital with them. So V meaning that a group of founders who consistently, the idea was back in 2013-14 in Delhi at least, Bangalore still had, there was no network.
Growth and Acquisition by OYO
00:17:29
Speaker
There was no network of founders. Like today, if you ask me in Delhi, no founder knows each other. They obviously know each other via being a part of a platform or a WhatsApp group. But there's no proper community. And I'm a big believer of community. I feel that community is so important. So I'll tell you, out of 10 unicorn founders, at least three or four or even more are on antidepressants. Now, this is so common.
00:17:59
Speaker
It is still considered a taboo or a stigma. So we decided to build these communities which were extremely closed where entrepreneurs just come and just share their experiences. So Project Gorilla was that. So we had a fundamental belief that let's keep backing great founders. Who were some of the founders that you backed? Anybody I would know? So we invested in a company called Joe Stocks.
00:18:27
Speaker
Yeah, I was their first investor. This was I think in the year 2014. We did a company called Inc 42. So we backed now in total, I backed close to 70 plus companies. And the whole idea
00:18:56
Speaker
was just to create a self sustaining ecosystem of great entrepreneurs working together. Okay, okay. Okay. So you started backing these founders once you had the deal with times done. How did eventually the innovate idea come up? You know, how did that start? So this was very interesting with that motto of back with your own funds meant that
00:19:25
Speaker
Our funds got depleted very quickly. And then we didn't have money to invest. So we had two options. Either we invest in actually getting more capital from the public, which was against the idea of Project Gorilla.
00:19:41
Speaker
and or we do something else where we build a community so the core fundamental passion was community building so we thought let's not get diluted let's focus on building a space where founders come and work together so in cannot place we built a space
00:20:00
Speaker
of 84 founders and we said just come and let's start working together and our idea was don't pay us money so we also didn't know what to do with it we had built a good space and slowly steadily we started realizing that this is fun like if you have great founders coming together and they start working together on a daily basis you actually build a tribe
00:20:26
Speaker
And then they started saying that, how will you run this? You have rental everything. Let us start giving you money because we are actually extracting a lot of value out of it. So I said, this is very cool. Let's do it. So we started making a hell of a profit at the city level. So we were extremely excited that a very small space in the North place could give us such a good cash flow.
00:20:54
Speaker
Having done all of that, we realized that here, this is a very interesting model. Let us focus on consistently, not now investing into companies, but now consistently building this community.
Expansion Strategy and Mentorship
00:21:08
Speaker
So we did that, we built two small campuses, one in Delhi, and one we thought, let's build, let's now try the thesis in a tier two city like Chandigarh.
00:21:20
Speaker
because we wanted to see, do we get the same response in Chandigarh as we got in the entire one city. So we did that. While doing all of this, I read an article that Indians are not selected by Y Combinator. So I was extremely intrigued by the idea of getting into YC. So I applied to Y Combinator and
00:21:43
Speaker
I just applied and I really wanted to get into YC. But was the concept that you are building a co-working space, was that around at that time? Did that industry exist like a co-working industry? Back in 2016, January, when we started the first campus, the term was extremely new to India. So in terms of Google searches also in co-working, there were three or four searches only happening and mostly they were done by people like me.
00:22:14
Speaker
So, I realized that this is an industry which is bound to grow because I think for every entrepreneur, the best friend is his common sense. The question is, as an entrepreneur, 40% of his seed capital goes into building office, giving security and 50% of his time goes into bussard management.
00:22:42
Speaker
ACB Chakra, we are, as India, we are a very infrastructurally challenged country, especially when it comes to commercial real estate. I think 0.00001% of the people have plus offices like DLF and all. 99.99999% offices in the country are so pathetic that you would not even want to go inside their washrooms. And I judge an office space by the way they keep their washrooms. So I realized that here,
00:23:11
Speaker
Why the hell are people not making good offices? When people spend more than 50% of their awake hours in an office space or while travelling to an office, when work is such an important part of their lives,
00:23:30
Speaker
Why would you not spend or make extremely welcoming offices? So I realized Indians have something, they are basically gar fields. They hate Mondays. They have Monday blues. Sunday shantu yana sabh kupit me dar udha kyaar paul. Bhak chok ho jata hai kyaar school jana. Monday test hai. Or badok ho jata hai kyaar shat hai hai. Beacon khatam.
00:23:57
Speaker
Now, on the other hand, there are people like me who love Mondays. I feel very sad on a Friday because I do something that I love. And I realize it has a lot to do with your office environment. Will be three, four extremely important things. Good design, good location, amazing in tech cleanliness, very basic things. So we did a survey.
00:24:23
Speaker
six, seven months, pre-COVID, six, seven months and we asked our customers, what is the most important part of an office space? You will be amazed to know the answer. It wasn't AC, Wi-Fi, it was Wi-Fi. We still have broken Wi-Fi's. That's the basic, like Wi-Fi's have become the fourth most important fundamental right of a citizen after health education and right to safety. Now,
00:24:51
Speaker
My question was, and the second was not light. It was AC. The third one was also not light. It was clean washroom. The fourth one was light. So we realized that at people, when they spend so much time in their offices, let's build a beautiful office. I don't know whether you have seen an innovate or not. Yeah, I have. I have seen the Noida one. Yeah, I have seen the Noida one.
00:25:41
Speaker
So our take was just imagine if your office is like Starbucks, consistently and you have your own cabin.
00:25:51
Speaker
And you don't have to spend, you convert your capex into opex. You have to have a seed capital of 0.5% of your security. If you don't have a lease, you have to have a landlord. If you don't have a lease, you have to expand. I said this is very common sense why the hell no one is doing it in India.
Selling to OYO: Cultural Alignment
00:26:15
Speaker
So we started this concept and one thing led to another. We went to Y Combinator. They really liked our product design and my background that I was a doctor doing this. They said, we are totally gungo about it. Just one change. You cannot become a large company until you do large campuses. So
00:26:41
Speaker
They asked us that you go back. I took a flight back to Bangalore from San Francisco. They said, don't worry about capital. Sign a large lease. I said, how large? In Karnataka, we were doing a 5,000 square feet. They said, at least, at least, not less than eight times of that. I said, are you freaking kidding me? I do not have money in my balance for the next ex-payment of rent. They said, we'll beg, borrow, steal. Don't worry. Your demo day is coming.
00:27:11
Speaker
Just, just take that leap of faith. I went to the negotiation. I see you gave some capital also when you get selected. Yeah, but that's like almost 85 lakh rupees, but the kind of space that we were going for was security deposit 85 lakh. So our four fundamentals were four. Location. We realized that how do we build a brand which is so powerful, the only way was location. Be closer to people's houses.
00:27:41
Speaker
Have them easily come to your place from their house. The second one was design. The third one was community. Fourth one was technology led ops. So we said that go to Bangalore. Go to the heart of Bangalore called Kormangla. Go to the most prime property of Kormangla. We started negotiating with the landlord very arbitrarily. We just barged into his office and we said we want to take your property. We took an old cotton mill, huge 40,000 square feet.
00:28:11
Speaker
We didn't have money to invest to build seven crores of capex, but we ended up raising capital post. And then I showed what we have done to Vijay from PTM. He was our first angel investor. So he wrote a check. Then a lot of angel investors like Rajan and then Vishal from Gucci.
00:28:30
Speaker
Sunil Kalra from StrikeVentures, all of them started investing in the company and then one thing led to another and as we speak pre-COVID we had 42 campuses span India both under construction and live. So that is where innovators we have sold the company to Oyo. So this is what we've been doing so far.
00:28:57
Speaker
So why did you decide to sell? I mean, your role model was Dhirubhai Ambani who kind of like built something over decades, you know, then why did you decide to sell? So I'm not emotional about a business. This is a true and candid opinion. I feel that every business should have a price.
00:29:27
Speaker
The question is, I've seen a lot of people lose money by not fixing that price and by overly emotional about a business. So in my opinion, the day you feel you've got that price and you want to scale and do you believe that you can scale this on your own?
00:29:51
Speaker
If the answer is yes, obviously don't sell. But if you feel that the collaborating partner has a lot of expertise, which can really help. When we sold, we were only 16 campuses. Within one year, we were thrice of that. So in my opinion,
00:30:13
Speaker
That is extremely important. And also, more than capital, I feel that are you culturally aligned with your acquirer? For us, OYO has been a great experience, massive learning, massive scale, a lot of the founders, the entrepreneurial culture. It's been a privilege to work with Ritesh, Rohit, and the entire team.
00:30:38
Speaker
OK, so you know, one thing I want to kind of maybe learn from you or understand your secret to it.
Focusing on Products and Consumers
00:30:47
Speaker
Like there are a lot of people whose whom you're connected with like Vijay Shekhar Sharma back to you. Ritesh, of course, bought you out. So, you know, is this like effective networking or what is it like? What's your secret behind getting such powerful backers?
00:31:06
Speaker
I think, I think the best way to get great backers. This is a beautiful secret. This will change your life. A great product. Now, this is a beautiful story. I'll just take one minute. So one of my father, my father is a pediatrician. He's a child specialist. His fiercest competitor, his
00:31:33
Speaker
Sister in law came to my dad and said that please don't tell my brother in law that I am showing my child to you. My father was puzzled that why has she come?
00:31:48
Speaker
So she said that, no, no, just that I don't want to do. So one day my father, after a lot of visits, asked that what happened. She said, he's very nice. He really loves my daughter. Everything is good. But my father, at that point in time, told me this story. And this I've never forgotten. No amount of network, no amount of nothing works. Great companies are built on great products.
00:32:17
Speaker
If you don't have a good product, how you may know, even PM Modi, he will not save you. He will not buy you out. He will not make you a cabinet minister. The idea is if you want to go up, focus on your job, give your heart, soul, blood and tears to it and you value your consumers more than God. Vaashekrishan ji aare yaasya aapka consumer aare?
00:32:44
Speaker
The biggest God you can have is your consumer. Consistently. Consistently. Consistently. Consistently. What is your consumer's thinking?
00:33:03
Speaker
What else can you do to make his life better? What more value can you add? I think that is the only secret about anything. You see an innovate. Okay, I'll tell you if you have say, 100 crores in your bank, and I come to you and I say that I'm a doctor, but I'm mad about co working. The industry is growing at 400% year on year compounded for the next 40 years.
00:33:28
Speaker
and I am the best player in the country. My NPS is more than 80% and at the same time,
00:33:37
Speaker
I am, you will not find an entrepreneur more hustly than me. I will not sleep. I will sit at my site, but get my customer the best experience possible. Why would anyone invest? I did not know Vijay because of anything else but my product. You're the best way to network. I don't believe in the concept of networking. The best way to network is to focus on your work. People will call you.
00:34:04
Speaker
You become the best podcaster in the world. You, as your entire show, you get 100 or say 100,000 or 200,000 listeners who are so addicted to your conversations. You will have people like me begging you, hey, can I please come on your platform?
00:34:28
Speaker
Can I please get eyeballs? Can people please listen to me? Build great products. The world will follow you. They will salute you. There's nothing in this world that is saluted more than a good product. Value. Generate value. Generate trust. I think that is the only secret towards building success in this world. And that takes a lot of hard work, blood, sweat, and tears.
00:34:51
Speaker
How did the introduction and the conversation with Oyo begin?
Media Narratives vs. Long-term Development
00:34:56
Speaker
Like did they reach out to you or like how did that happen? So I had been in touch with Ritesh and Maninder and one day out of the blue,
00:35:09
Speaker
they reached out and we didn't have even an investment banker in between like it was that beautiful of a journey with them and we sealed the deal very quickly and we started working on building this out.
00:35:25
Speaker
So Ritesh, of course, gets both a lot of positive press and negative press. What is he like as a person? He's amazing, delightful. He's one of the finest entrepreneurs. I've learned personally a lot from him. He's one of the finest entrepreneurs I know. And of course, now he's a very good friend as well.
00:35:44
Speaker
So I can I can I can vouch both as a friend, as a colleague. I think he's a he's a brilliant human being. And from the roots that he comes from, it's inspiring to see and see that when it comes to press and media. Up against the economy, Bill Gates or Jeff Bezos or Elon Musk, there is no one who has been abused more than Jeff Bezos in this world.
00:36:13
Speaker
for not creating enough profits for the investors. See, I'll tell you, public memory is very short. Press will write a lot of good things, a lot of bad things. Always remember, press is only focused on the short term. Press is short sighted and also we should realize who is press run by. Press is run by some
00:36:42
Speaker
journalists who may or may not understand the big picture. So, and also if you see content, which is negative being very candid content, which is negative, if you write about that OO adds these many hotels, it's good. But the moment you write about that OO has got XYZ challenges,
00:37:11
Speaker
And it is also our mistake. As a consumer, it's my mistake, it's your mistake. That we need negative content more. We are more bothered about what Kanganaar not said to that Diljeet Dosaanj, than a positive farmer trying to just work and uska pusturini par nachata. So, press the job and actually journalist the job about difficult tech. They also have their targets, they also have, it's finally a business.
00:37:41
Speaker
They have to ensure that these many eyeballs stick. So I don't blame anyone, but I feel that good press, bad presses is a short-term focus. As entrepreneurs, our only duty is towards building great products. And of course, some people will agree. You can't make everyone agree.
00:38:06
Speaker
or you can't make. I truly believe that it's all about perspective. And also, India has one thing. Do you know which is that one country, which has a feedback form? That is India. Because we have a habit of writing in feedbacks. We feel that we are correcting someone's paper. We get all that power.
00:38:30
Speaker
And I realized that India as a country, we have still not gotten away from the shackles of such a long duration of concursion.
00:38:54
Speaker
So I think we still are extremely fragile emotionally. So we just read and write whatever we see and we justify emotionally and explain logically. So I think that is something that I feel that in the long term today, can you name one player in the world who owns the one and two star hotels market?
00:39:24
Speaker
No one is there, except of OYO. It's a global brand. Now, this is such an unstructured sector that you will find a lot of challenges while dealing with those merchant partners, while dealing with such customers. Today, and being in the system, I met a person in Bhulanchere. I said, may OYO come here?
00:40:01
Speaker
And you can't you and see for a person who can afford both ginger slash
00:40:14
Speaker
a good hotel like Vivanta Taj for us, oh you might be taken because for us 690, 999 and 2,000,000 or 2,000,000 or 2,000,000 or 2,000,000,000 doesn't matter. Just ask the 91% population of this country who's not even making 9,500 rupees a month. So in my opinion, this is significant impact.
Post-Acquisition Growth
00:40:45
Speaker
Yeah, you're right. So how has life changed for you after acquisition, like after the innovate acquisition? So the first one is, of course, for the first time I've had some money. So just investing that. Secondly, in terms of the fact that
00:41:10
Speaker
Building innovation for those three years was extremely excruciating on your mental health, spiritual health, physical health. You just travel, you don't sleep. For the first time, we had funds to actually build it into a corporate machinery. Learn a lot from OYO. I was fortunate to have partners like Gaurabh, Eshwaraya, Ankush, Sheel, Vivek while building the entire machine, which we called the founding team.
00:41:38
Speaker
And then led by Rohit, we really had a good time with OYO. We learned a lot. I personally evolved significantly as a founder and post that at like we have 3XR group. So, of course, it was a great experience working alongside leaders from OYO. Are you operationally involved in running innovate currently? So currently I'm not.
00:42:02
Speaker
But still, I'm deeply involved in the entire ecosystem of OO. And it's great to be a part of such a fast-running company. How many hours of sleep were you getting during those three years of building up in OVID? What was your workday like? So it was a very interesting sort of a workday where I was the chief janitor of the organization.
00:42:31
Speaker
It was basically, my job was and see as an organization, we couldn't afford senior mature leaders. So we hired anyone. And we realized that it becomes basically in India, the larger worry is not about work. It's about managing emotions.
00:42:51
Speaker
So my whole job the entire day was to ensure that wherever it litters, I just go and clean. And at the same time, India saw challenges. We had a multi-city business across nine, ten cities. So Bombay was very new for me and especially a real estate based business, extremely obsolete.
00:43:15
Speaker
So one day someone called and they said that So there was there's a concept called Mahadi in Bombay. We have to where you have to pay some money in cash to them
00:43:44
Speaker
So these are small challenges, but yes, it's fun. When you build something, our whole thesis was, if you see our campuses, we've been awarded
00:43:54
Speaker
A lot of awards for our design. You see our campuses, we are compared with the best in the world. And we are almost one third when it comes to our cost. So we are extremely proud of our Indian heritage. We use jute, we use square, we use things which are abundantly available bamboo in India. And I think that is something which we stand out as a brand.
00:44:16
Speaker
Okay.
Investment Approach and Ethics
00:44:18
Speaker
So tell me now, what is your thesis as an investor? So you're now a more active investor. You know, what do you look for? You must be getting a lot of pitches. You know, how do you screen? How do you, you know, what's your, I mean, what do you look for when you want to back someone? See, when it comes to startup investments, no, if someone says that I can tell you that this is the only way to invest in a startup, I always judge them.
00:44:46
Speaker
There is no one in this world who can tell you because startups, it's basically like playing casino. Your odds are five to 100. So in my opinion, my fundamental belief is that when it comes to startup investments, I just see three things. Are the founders ethical? Will they go the last mile?
00:45:16
Speaker
cut the bullshit. There is a lot of message when founders talk to me. And I just need to take things which actually I just need to ask them questions which actually show their integrity. And thirdly, I feel that is the market large enough and is the impact there? There are a lot of industries you can make money that there's a Canadian toothpick company, which makes a $2 billion revenue just by selling toothpicks.
00:45:45
Speaker
You can do that as well. But if you want to make impact, can you remove the middleman? And by leveraging technology, help people access health care in our country, where we are not even spending properly 2% of our GDP on health care, whereas developed nations like America are spending 20% of their GDP. And especially in a country which has very 136 billion people,
00:46:16
Speaker
We are not even catering to 2% of all healthcare in this country. Right. Yeah. So is healthcare a focus for you, like in terms of startup sectors? I'm extremely sector agnostic. So I believe that healthcare till now has not been a focus because healthcare is a passion.
00:46:42
Speaker
India has a mind... See, India has a mind-check of different types of people. There is social media, there is dal makhni khao. There is a better way of doing it. There is no social media, there is no dal makhni khao. There is a hospital, there is a tangible value. In tangible value, there is a glass. There is a glass that has a number of people, but there is a glass pack that has a glass pack.
00:47:24
Speaker
That is why advisory in our country is not valued.
00:47:29
Speaker
So in my opinion, that is why in healthcare, when people come to my father also, they will try to ensure. So I feel that healthcare as an industry, it is a very good industry, poised for disruption, but still, I think, so in my opinion, the best businesses are the ones where lowest hanging fruit.
00:47:58
Speaker
It should be our customer value value. I think that is extremely important. Okay. So give me some examples. It is such a beautiful industry when we started before launching. Because demand is like so high. There was a latent demand which nobody was tapping. Yeah.
00:48:29
Speaker
Give me some examples of founders who impressed you. Like, you know, you either like the person or the business or Vijay. Vijay is like, he's, I cannot emphasize how amazing he is. I've learned personally a lot from him. He's just like an elder brother. Okay. Okay. Some founders that you invested, like, you know, a more younger lot. I really like Joe Stocks. I really like Joe Stocks.
00:48:58
Speaker
Because of the impact, they touch 75 million people every month on Facebook and 25 million on YouTube. So 100 million eyeballs is a good number. So can you give a reverse pitch to founders that why should they have you as an investor? What is the value add that Ritesh brings to the table?
00:49:27
Speaker
So honestly, I'm not worried about deals by God's grace. I have not got any founder who said, and I think there's a reason behind that. For me, my reverse pitch is very simple. It's that I'm not a PETA. I always call this the PETA syndrome which Indian investors have. It's called the pain in the ass.
00:49:53
Speaker
Indian investors actually give you some mutual fund family offices and some start up investments in your story. They feel that mutual fund is a miracle. They don't understand it is the riskiest investment in the history of mankind. And you need to burn your bridges, you need to burn your capital. When I invest in a company, I invest only the amount of money which I feel I can lose.
00:50:20
Speaker
If that money per year is 1 crore rupees, I just do that according to my own bed sheet. I do not do that. Second, I don't gamble. Third, when I invest 1 crore rupees an year, I ensure that that is gone. I will never get it back. If I get it back, it's a miracle. Let's celebrate. Now, with that mindset, you never create pressure on the founder. You are always here. Let's build something together.
00:50:48
Speaker
1 crore rupees is only to be a part of 10 companies this year, just to be a part of their journeys and learn from them. Yemira, R&D, Costa do uplift Ritesh Malik's skills. So I think that is the only way. And honestly, that is the reason I do not know technology very well. I don't have a good pedigree. I'm just all right. I'm not a great track record investor also. But
00:51:16
Speaker
That is the reason I think in India there is no start-up who has not pitched me. So that was Dr.
Conclusion and Listener Engagement
00:51:23
Speaker
Ritesh Malik talking about his entrepreneurial journey. He is not only an entrepreneur but also a doctor and he has been actively educating people on COVID prevention and treatment. Follow him on LinkedIn or Twitter to get the advice that can literally save your life.
00:51:41
Speaker
If you like the Founder Thesis Podcast, then do check out our other shows on subjects like Marketing, Technology, Career Advice, Books and Drama. Visit the Bodham.in that is T-H-E-P-O-D-I-U-N dot I-N for a complete list of all our shows.