A Cook follows a recipe, a Chef reinvents cooking - Basic tips to grow from 0 to 1.000 people in 12 months

Obs: 10 min lecture

Right before Christmas of 2018, I got hired as the first employee “Launch Head” for a tremendous entrepreneurial  project, discreetly called OYO.

No one had heard of OYO in South America yet, but the interview process truly turned me into a super-fan: an audacious and market-driven project, an opportunity to create a stellar team in Brazil, and already a Softbank-backed venture with 1.4B USD in its pockets. What else?!

Oyo Rooms is an Indian hotel chain, one of the largest and fastest-growing hospitality chain of leased and franchised hotels, homes and living spaces. Founded in 2013 by Ritesh Agarwal, the startup expanded globally with thousands of hotels, vacation homes and millions of rooms in hundreds of cities in India, China, Brazil, UK, Japan, the United States and much more. The company's investors include SoftBank Group, Greenoaks Capital, Sequoia India, Lightspeed India, Hero Enterprise, Airbnb or China Lodging Group.

OYO India sent a few experienced folks from India and we kicked-off  the (ad)venture that would become OYO Brazil.  No playbook, no strict rules, only a couple of OYOpreneurs starting from scratch, just us, our guts, our instincts and little else. The way I like it !

After 1+ year of cruising and multiple after-action reviews of the already largest and fastest growing hotel chain in Brazil, I would like to share a bit of our first-months experience as well as new challenges coming ahead. Below are some of my own rules and conclusions that apply to launching.

Basic rules at launching

Starting from scratch is always a stunning experience as you have no true north, no recipe or data to support your decision-making process. Brazil makes no exception and is ultimately well-known for hosting epic fails of foreign companies playing by-the-book.

#Be wrong to learn fast

From the onset, our small launch team had to learn, do experiments in order to get answers, and use them to rapidly grow. Yes, we spent our money to make errors and generate learnings, the so-called mistake budget. Don’t fool yourself, you have to be wrong to learn. Being wrong is the only way to learn fast what to do iteratively / what not to repeat.

Be strongly wrong, not averagely right.

#Never forget time is precious

A startup consists of capital, people and time, where time is the only factor that is irreplaceable. Period. We had to act fast and try not to think too much! No one plans for indecisiveness, but indecisiveness is exactly where you can easily end up. If you have enough clients, A/B test and don't stop in never-ending debates. If you don’t have clients, make a random decision or flip a coin.

Execution dies from too many debates and the downside of democracy is huge. All good startups are tyrannical.

#Growth is your obsession

Growth was our only job. And there are only two kinds of activities in a startup (1) activities resulting in growth (2) everything else. In a startup, we all know that everything is urgent, so we had to stay focused, learning to say "no" or not executing anything which was not turning the company bigger.

Get big or go home

In a global company such as OYO, we obviously faced a couple of non-growth but compulsory tasks, so we learned to streamline them to achieve great time efficiency. 

At the very beginning, we did not spend time on building processes, as everyday we were changing our minds. We were tracking only basic metrics, the so-called life metrics. No time for deep analysis or beautiful KPI dashboards, we were literally looking for momentum so that our operation could take off. 

Make it simple

Growth obsession in mind, we divided our activities into three pillars:

1. Hiring the first "rock stars"
2. Selling to the first properties to validate our product-market fit in Brazil
3. Delivering what we promised to enter the virtuous cycle of word-of-mouth

Important to remember that in the specific case of OYO, our business model is strongly driven by the supply side, meaning we had to on-board the first hotels to make our supply consistent enough for matching demand patterns on the mid-term (OYO app).

#Hire only stars

Building a great founding team is probably the most difficult task you face at day-0. At the very beginning, you have to focus on human qualities rather than proper skills. Strangely, having a strong skill set is not so important. It’s more the capacity to learn new things or build a strong culture which will add high value. 

Don’t take me wrong, we had to hire smart people at OYO, but again, a new hire does not need to be technically ready. Nowadays, learning is a commodity, anyone can learn anything easily on the internet and soon be smart on every single project.

Anyone can learn anything. Being smart is a commodity nowadays.

In recruiting human values versus competences, we also on-boarded people with faith in our mission. Employees who truly believe in the purpose are the DNA of the company. They make our community vibrate and help us grow very fast.

Problem-solving session with our Global COO Abhinav Sinha

Being focused on hiring the right people, we succeeded at building a strong culture at OYO. It is also important to remember that culture has never been a beautiful powerpoint presentation. Culture has nothing linked with company perks, vacations, what you say or what you write down. Culture is only the people you hire, and soon the staff members you promote, whom you either pay well or you fire.

Having that said, a strong culture is fundamental at the beginning of the company as it will let you attract the best talents, help you survive bad moments or take quick decisions for a swift execution.

As one of our leaders Rodrigo Maroja always says:

"Culture is not negotiable", meaning you have to make the right decision when someone is not a cultural fit for your company

#Validate rapidly the product-market fit

Successful startups are market-driven, obsessed about a problem. So we tried to figure out what was our main problem in Brazil, we tested multiple pitches for going through gatekeepers during outbound calls and for signing every single contract faster than its predecessor. Focusing on the market problems is basically assuming that:

“It is always easier to sell painkillers than any vitamin” !

At OYO, we have created an intimate relationship within an antiquated hospitality market. Focusing on low occupancy / vacant rooms, no quality standards, lots of independent hotels with no brand power, we rapidly succeeded in adapting our offer for Brazil. Our product-market fit became rapidly obvious: lots of unanswered emails, owners yelling at us, and so on. Our team was completely stressed, late all the time, and trying to keep  its head above water. It was a good sign, we were getting traction !!

Our first contract in Brazil - Hotel S?o Judas (former Corpo Dourado)

And our first (well-deserved) celebration. Don't forget to have fun !!

#Deliver what you promised

Selling the OYO value proposition to our first properties was the easy part of the job, now we had to deliver what we promised. At that time, we had no supplier and limited resources to execute on schedule, i.e a limited staff and a small available cash flow as our capital infusion was still blocked in the Central Bank's bureaucratic depths :)

At that time, moving in a still informal ecosystem saved us. We took advantage of our informality to get the right speed and make things happen. I remember our sales team went to Casas Bahia to buy TVs and Air-cons, eventually I went myself to the Shopping Mall to purchase linen and do our first photo-shooting with my personal camera, thus taking live our first property on booking.com in record time. Things have to happen in high-velocity and right on schedule in order to make our first owners content with OYO.

At the end, happy owners mean happy guests !

Word-of-mouth -and ideally going viral- is the true manner to get a healthy traction in your market. Money can easily blind you about your mistakes, but being customer-centric is the true way to become successful. 

Sustain your growth

Soon enough, we got traction and the right momentum to sustain our growth at scale. Remember you have 2 steps in a hyper-growth start-up life:

• Pre product-market fit when you build your products, experiment, and talk to customers for adapting rapidly your offer
• Post product-market fit when you massively hire people and create processes to sustain your growth

Eventually, we started to look into the real metrics and real insights that we got at a small scale for now growing very fast. From here, we built processes to scale up and monitored closely our performance metrics to quickly adapt iterations in our daily execution. 

#Time is still the first commodity 

In a hyper-growth ecosystem, managing time is a top priority. You are in need of a well-defined governance with processes, KPI dashboards, or appropriate structure. You have to design proper tools, specific training to on-board a large amount of new hires, thus ensuring you are being time-efficient in every single growth activity. 

#KPIs is your best friend

Metrics dashboards must be the entrance gate for every single project you focus on. There are thousands of KPIs you can use, but you have to find what is right for you. Choose a few and focus on those. Be also careful about vanity metrics. These are the ones that you need when you are about to send out a press release, but otherwise, they don’t really mean anything.

Only a KPI tells you if you are on track or not, if you are failing or not and at the end, if you are making money.

At OYO, we started in S?o Paulo and got a small monopoly there. Soon we pushed out to the entire state, then we expanded out to Rio de Janeiro, Belo Horizonte, and the whole country. We achieved in 550+ cities, reaching 1.100+ employees in a single year, thus being one of the fastest growing companies in the history of Brazil.

The very first 15 employees at OYO Brazil

The first 30 employees at OYO Brazil

All-hands meeting when we reached 1.000+ people (most people connected online)

But no one is perfect !

Evolving in a hyper-growth ecosystem, most decision-making processes consist of critical trade-offs, literally based on balancing quality <> cost <> velocity. 

As speed is not optional, quality comes through high investments. Having said that,  no one is perfect and OYO has also failed at building core processes or sometimes caring well about its customers. 

Failing or facing problems is part of the game (and remember, the only way to learn fast). The only possible answer to any issue is to do whatever it takes to fix it. No excuse or scapegoat, you just admit that “we screwed up as a team and we will fix it“.

Ask forgiveness, not permission

In such bad periods at OYO, we always tried to maintain a great communication and appropriate commitment in order to save time for implementing corrective actions. It is also a fundamental behaviour to build real trust within your partners' community, so that all together we will stick for the long run.

Care or die

When it comes to achieving capital efficiency (sooner or later, profitability is not an option), do not stop caring about your clients or you will die !! Caring about your clients means they will accept your failures, they will fight for you if necessary, and above all they will promote your brand as true ambassadors. By the way, care not only about your clients but any person in your community, e.g. employees, investors, partners, suppliers… and as a result you will create a virtuous circle of positive vibes.

Playing fair, you usually create superfans and haters of your brand. “Superfans” are commonly early-adopters and true brand lovers, and “haters” are people who claim you are a farce. Ultimately, “haters” are the ones who stand up against the changes you are making in your market. People often hate changes and having “haters” means you are truly being disruptive. Yes, the number of “haters” you have is the real metric of your growing success !!

Keep faith and remember, it's always Day Zero.

Alex Bretzner - alexandre.bretzner (at) gmail.com