Based on interview of Mr. Ritesh Agarwal, Founder & CEO of OYO Rooms. Mr. Agarwal is the youngest billionaire entrepreneur in India. He established a large company at a very young age. He made his company a Decacorn with: - Valuation of around 10 billion - Turnover of around Rs. 6000-7000 crores in the year 2019 and expected to be Rs.16000 crores by 2020 - Team of thousands of people - Around 1 lakh hotel partners who operate in 80 countries 1. **What?-** What is mean by conceiving the idea of business? 2. **Why-**Why should you conceive the idea of your business? 3. **How?-** How to conceive the idea of your business? # **How was the idea of OYO was conceived?** It was not a big secret to search for a clean room to stay for the people. Mr. Ritesh shares that during his childhood, he visited Mahakumbh in Allabhad and this was the first time he got a chance to stay in a hotel. He learned some basic things about customer’s requirement such as: - Cleanroom - Affordable price - Best room service Before Oyo, many large companies including foreign companies tried to avail a clean and affordable room to an economy customer in India. Mr. Ritesh found a huge difference between the expectations of a middle service class customer and the actual services provided by the large companies. These differences were as follows: - Price difference: - Indian customers expected a clean room to stay within a budget of Rs.1000- 1500. - But this room facility was available for approx. Rs. 4000 in large hotel chains. #### **Asset-Lite Model:** - All large hotels used to purchase land and construct their hotels. - Mr. Ritesh observed that there are lakhs of small hotels & guesthouses in India and nobody is using them. - He thought of joining these small hotels and utilise their rooms for his customers. #### **Food:** - Food is the most important requirement of our customers. - He ensured to provide hygienic food to the customers in the Oyo rooms. - Big brand hotels used to provide food services in the lobby and customers had to go there to eat food. - Also, lunch and dinner were not available in many places. - **WiFi:** Due to the internet revolution in India, WiFi is an important requirement of customers. >**Mr. Agarwal shares his experience of meeting with an entrepreneur who shared his viewpoint with him as follows:** This person had recently passed out from the college and he considered the customer's requirements in the following points: #### **1. Homemade food delivery:** - He explained to Mr. Agarwal that there is a specific requirement of homemade lunch and dinner in a specific segment. - Many you people don’t like to cook food at home, but they like homemade food. - So, they decided on a food segment. #### **2. Cloud kitchen:** Second, it is very tough to create value if he opens up his kitchen. So, he started a cloud kitchen inside the basement of someone else's hotel. This reduced his lease expenses. ##### **Easily move to the second option:** In the cloud kitchen, if one type of food is not liked by the customers, they can move immediately to the second type of food. ##### **Easy marketing:** - His marketing became very easy because large platforms such as Swiggy, Zomato distributed their food items. - So, he decided on homemade food and checks the competition on Swiggy and Zomtao. - He found that there was not much competition on Swiggy and Zomato. - So, he focused on this market. ##### **Price:** - He checked the price of competitors and the price that should be decided by the cloud kitchen. - These prices should make profits for them and provide a sound choice for the customers. ##### **More customer ratings:** - This young entrepreneur ensured that the customer's ratings should be high. - So, you should understand the basic 4-5 things about the customer. You should serve the customer at a price point where he is happy and you can also make a profitable model. #### **3. Distribution:** You should use a distribution channel to connect with customers. #### **4. The minimum investment in asset:** You should invest the minimum amount in the assets such as hotel rooms and kitchen. All these 4 thoughts are a very important part of the initial idea that helped Mr. Ritesh to make their Oyo rooms and his friend in his cloud kitchen. You can also start your new business with the help of these ideas. To sum up you should do follow these strategies in your new business: - Identify customer’s problem - Identify market gaps - Asset light Therefore, you should invest less amount in fixed assets, reduce expenses, and connect people with you to start any business.