1. INDEX
 WHAT IS ENTREPRENEUR
 ENTREPRENEURSHIP
 CHARACTERISTICS OF ENTREPRENEUR
 NATURE OF ENTREPRENEURSHIP
 WHAT MAKES SOMEONE AN ENTREPRENEUR
 ENTREPRENEURSHIP AND ECONOMIC
DEVELOPMENT
 RITESH AGARWAL – OYO ROOMS
 HISTROY
 RITESH AGARWAL'S JOURNEY FROM BEING A
SIM-SELLER TO THE HELM OF OYO ROOMS
 WHY A 21-YEAR-OLD IS BUILDING OYO
 SOFTBANK LEADS RS 630CR FUNDING IN OYO
ROOMS
 CONCLUSION

2. WHAT IS ENTREPRENEUR
An entrepreneur is a person who starts and runs a business or organization. An entrepreneur is
also called a founder. He or she develops a business plan, obtains financing and
hires employees necessary to run the business. The entrepreneur starts with a good idea for a
new business. While the business grows, the entrepreneur is the central person in the business.
What is meant by entrepreneurship? The concept of entrepreneurship was first established in
the 1700s, and the meaning has evolved ever since. Many simply equate it with starting one’s
own business. Most economists believe it is more than that. To some economists, the
entrepreneur is one who is willing to bear the risk of a new venture if there is a significant
chance for profit. Others emphasize the entrepreneur’s role as an innovator who markets his
innovation. Still other economists say that entrepreneurs develop new goods or processes that
the market demands and are not currently being supplied. In the 20th century, economist
Joseph Schumpeter (1883-1950) focused on how the entrepreneur’s drive for innovation and
improvement creates upheaval and change. Schumpeter viewed entrepreneurship as a force of
“creative destruction.” The entrepreneur carries out “new combinations,” thereby helping
render old industries obsolete. Established ways of doing business are destroyed by the
creation of new and better ways to do them. Business expert Peter Drucker (1909-2005) took
this idea further, describing the entrepreneur as someone who actually searches for change,
responds to it, and exploits change as an opportunity. A quick look at changes in
communications—from typewriters to personal computers to the Internet—illustrates these
ideas.
Most economists today agree that entrepreneurship is a necessary ingredient for stimulating
economic growth and employment opportunities in all societies. In the developing world,
successful small businesses are the primary engines of job creation, income growth, and
poverty reduction. Therefore, government support for entrepreneurship is a crucial strategy for
economic development. As the Business and Industry Advisory Committee to the Organization
for Economic Cooperation and Development (OECD) said in 2003, “Policies to foster
entrepreneurship are essential to job creation and economic growth.” Government officials can
provide incentives that encourage entrepreneurs to risk attempting new ventures. Among
these are laws to enforce property rights and to encourage a competitive market system. The
culture of a community also may influence how much entrepreneurship there is within it.
Different levels of entrepreneurship may stem from cultural differences that make
entrepreneurship more or less rewarding personally. A community that accords the highest
status to those at the top of hierarchical organizations or those with professional expertise may
discourage entrepreneurship. A culture or policy that accords high status to the “self-made”

3. individual is more likely to encourage entrepreneurship. This overview is the first in a series of
one-page essays about the fundamental elements of entrepreneurship. Each paper combines
the thinking of mainstream economic theorists with examples of practices that are common to
entrepreneurship in many countries.
The series attempts to answer:
• Why and how do people become entrepreneurs?
• Why is entrepreneurship beneficial to an economy?
• How can governments encourage entrepreneurship, and, with it, economic growth?
One important choice that new entrepreneurs have to make is whether to start a business
alone or with other entrepreneurs. They need to consider many factors, including each
entrepreneur’s personal qualities and skills and the nature of the planned business. In the
United States, for instance, studies show that almost half of all new businesses are created by
teams of two or more people. Often the people know each other well; in fact, it is common for
teams to be spouses. There are many advantages to starting a firm with other entrepreneurs.
Team members share decision making and management responsibilities. They can also give
each other emotional support, which can help reduce individual stress. Companies formed by
teams have somewhat lower risks. If one of the founders is unavailable to handle his or her
duties, another can step in. Team interactions often generate creativity. Members of a team
can bounce ideas off each other and “brainstorm” solutions to problems. Studies show that
investors and banks seem to prefer financing new businesses started by more than one
entrepreneur. This alone may justify forming a team. Other important benefits of teaming
come from combining monetary resources and expertise. In the best situations, team members
have complementary skills. One may be experienced in engineering, for example, and the other
may be an expert in promotion.
In general, strong teams have a better chance at success. In Entrepreneurs in High Technology,
Professor Edward Roberts of the Massachusetts Institute of Technology (MIT) reported that
technology companies formed by entrepreneurial teams have a lower rate of failure than those
started by individuals. This is particularly true when the team includes a marketing expert.
Entrepreneurs of different ages can create complementary teams also. Optimism and a “can-
do” spirit characterize youth, while age brings experience and realism. In 1994, for example,
Marc Andreessen was a talented, young computer scientist with an innovative idea. James
Clark, the founder and chairman of Silicon Graphics, saw his vision. Together they created
Netscape Navigator, the Internet-browsing computer software that transformed personal
computing. But entrepreneurial teams have potential disadvantages as well. First, teams share
ownership. In general, entrepreneurs should not offer to share ownership unless the potential

4. partner can make a significant contribution to the venture. Teams share control in making
decisions. This may create a problem if a team member has poor judgment or work habits.
Most teams eventually experience serious conflict. This may involve management plans,
operational procedures, or future goals. It may stem from an unequal commitment of time or a
personality clash. Sometimes such conflicts can be resolved; in others, a conflict can even lead
to selling the company or, worse, to its failure. It is important for a new entrepreneur to be
aware of potential problems while considering the advantages of working with other
entrepreneurs. In general, the benefits of teaming outweigh the risks.
I t is easy to be captivated by the promise of entrepreneurship and the lure of becoming one’s
own boss. It can be difficult, however, for a prospective entrepreneur to determine what
product or service to provide. Many factors need to be considered, including: an idea’s market
potential, the competition, financial resources, and one’s skills and interests. Then it is
important to ask: Why would a consumer choose to buy goods or services from this new firm?
One important factor is the uniqueness of the idea. By making a venture stand out from its
competitors, uniqueness can help facilitate the entry of a new product or service into the
market. It is best to avoid an entry strategy based on low cost alone. New ventures tend to be
small. Large firms usually have the advantage of lowering costs by producing large quantities.
Successful entrepreneurs often distinguish their ventures through differentiation, niche
specification, and innovation.
• Differentiation is an attempt to separate the new company’s product or service from that of
its competitors. When differentiation is successful, the new product or service is relatively less
sensitive to price fluctuations because customers value the quality that makes the product
unique. A product can be functionally similar to its competitors’ product but have features that
improve its operation, for example. It may be smaller, lighter, easier to use or install, etc. In
1982, Compaq Computer began competing with Apple and IBM. Its first product was a single-
unit personal computer with a handle. The concept of a portable computer was new and
extremely successful.
• Niche specification is an attempt to provide a product or service that fulfills the needs of a
specific subset of consumers. By focusing on a fairly narrow market sector, a new venture may
satisfy customer needs better than larger competitors can. Changes in population
characteristics may create opportunities to serve niche markets. One growing market segment
in developed countries comprises people over 65 years old. Other niches include groups
defined by interests or lifestyle, such as fitness enthusiasts, adventure-travel buffs, and working
parents. In fact, some entrepreneurs specialize in making “homemade” dinners for working
parents to heat and serve.

5. • Innovation is perhaps the defining characteristic of entrepreneurship. Visionary business
expert Peter F. Drucker explained innovation as “change that creates a new dimension of
performance.” There are two main types of product innovation. Pioneering or radical
innovation embodies a technological breakthrough or new-to-the-world product. Incremental
innovations are modifications of existing products. But innovation occurs in all aspects of
businesses, from manufacturing processes to pricing policy. Tom Monaghan’s decision in the
late 1960s to create Domino’s Pizza based on home delivery and Jeff Bezos’ decision in 1995 to
launch Amazon. com as a totally online bookstore are examples of innovative distribution
strategies that revolutionized the marketplace. Entrepreneurs in less-developed countries often
innovate by imitating and adapting products created in developed countries. Drucker called this
process “creative imitation.” Creative imitation takes place whenever the imitators understand
how an innovation can be applied, used, or sold in their particular market better than the
original creators do. Innovation, differentiation, and/or market specification are effective
strategies to help a new venture to attract customers and start making sales.
ENTREPRENEURSHIP
In this module, we are going to look at the entrepreneur. We will determine what it takes to
start a business, and you will create a business plan of your own. Before we get started, we need
to think about a few characteristics of entrepreneurs. One question to consider is about
growth. Does a business need to grow fast to be considered an entrepreneurial firm? Once a
business has been started, it needs to grow until the owner is satisfied with the amount of
money being created by the firm. Michael Dell, founder and C.E.O. of Dell Computer
Corporation, and Bill Gates of Microsoft, have created businesses that have grown rapidly.
Other companies, such as Justin Boots and Taco Cabana, have experienced slower, yet
substantial, growth. Perhaps the growth and the ultimate size of a business are a function of
the entrepreneur's desire for growth and the ability to manage growth in an expanding market.
Growth is not automatic. It is controllable and can be managed, nurtured, or pruned. Not all
businesses are intended to become large firms requiring a full-time effort on the part of the
entrepreneur. In some of the examples you just read, many of the businesses were established
to provide supplemental income. Another example might be a teacher who provides tutoring
services part-time in addition to his or her teaching. A business may also be a substitute for a
full-time job when a person is between jobs.
Effects of Product Ideas and Marketing on Growth Businesses with a creative product or
marketing process have a greater opportunity for growth if that growth can be achieved before
others copy the concept. This type of growth often results from identifying a need in the
marketplace. When Dave Thomas started Wendy's, he had to determine how to produce juicy

6. hamburgers without wasting food. Thomas achieved this by removing the hamburger patty
from the grill before it became overcooked and using it as the ground hamburger in chili. Years
ago, Chevrolet gained a foothold in Ford’s essential monopoly by offering automobiles in
different colors.
Ford offered its Model T in one color—black. Chevrolet offered several colors, and they were
twice as expensive as the Ford automobiles were. Opportunity Recognition It has been noted
that entrepreneurs identify opportunities at a time when they are prepared to convert those
opportunities into business ventures. Some call this luck. Wayne Huizenga is the entrepreneur
who built Waste Management, Blockbuster Video, and AutoNation. All three firms are the
largest in their industries. He also owns the Miami Dolphins, the Florida Panthers, and Pro
Player Stadium. The opportunity for Waste Management arose when customers became
dissatisfied with the cleanliness and the amount of time required for trash removal. Wayne
started this business with leased trash containers. The founding of Blockbuster was the result of
a friend informing him of a business opportunity in Dallas, Texas. The friend told him that
customers objected to the limited number of videotapes available for rental and to the
requirements for buying membership cards. Wayne built a chain of large video stores and gave
discounts to those with membership cards.
Finally, Wayne built AutoNation to provide customers with a no-hassle, one-price approach to
buying an automobile. AutoNation addressed the customers’ frustration with high-pressure
salespeople who push options in order to increase their commissions. It is interesting to think
about how many others had identified the same needs or frustration but were not prepared to
take action. Consider the often-noted demand for a better mousetrap. At last count, there were
about twenty patents for "improved mouse traps" registered with the United States Patent
Office. Yet only the standard trap appears on the markets, and its demand has been reduced by
other means, such as better sanitation and poisons. Absence of a product in the marketplace
does not always indicate an unfilled demand. For example, how many guillotines are sold on a
yearly basis?
Wherever you turn these days, you will come across the term entrepreneur or
entrepreneurship. Pick up a current newspaper or magazine or turn on TV news broadcast. Or
log onto web sites there is a huge chance that you’ll find at least one story (and probably many
more) about an entrepreneur or an entrepreneurial business. Entrepreneurship is a popular
topic these days! So it is necessary to know what it is. Let’s try to answer this by looking at how
entrepreneurship is defined.
Defining Entrepreneurship: Defining entrepreneurship might seem simple, but it isn’t! There
are about as many definitions of entrepreneurship. Everyone seems to have his or her own
views about what it is and in the same way they have defined it. Let’s look at some of the

7. various ways in which entrepreneurship has been defined. “Entrepreneurship is the propensity
of mind to take calculated risks with confidence to achieve a predetermined business or
industrial objective. In substance, it is the risk-taking ability of the individual, broadly coupled
with correct decision-making.” In another view “Entrepreneurship refers to an action process of
entrepreneur towards establishing an enterprise. It is a creative and innovative process and
adapting response to environment. This concept can be seen in Figure 1.1 Entrepreneurship has
long been described by researchers and writers with terms such as new, innovative, flexible,
dynamic, creative, and risk-taking. Many authors have said that identifying and pursuing
opportunities are an important part of entrepreneurship. According to Frank Knight, “It involves
a specialized group or persons who bear ‘risks’ and meet the uncertainty”.
According to Mussel man and Jackson, “Entrepreneurship is the investing and risking of time,
money and effort to start a business and make it successful.” In the words of B. Higgins,
“Entrepreneurship is meant the function of seeking investment and production opportunity,
organizing an enterprise to undertake a new production process, raising capital, hiring labour,
arranging the supply of raw materials, finding site, introducing a new technique, discovering
new sources of raw materials and selecting top managers for day to day operations of the
enterprise.” This definition highlights risk-taking, innovating and resource organizing aspects of
entrepreneurship. According to Franklin Lindsay, “Entrepreneurship is defined as anticipating
the future requirements of society and successfully meeting these needs with new, creative and
imaginative combinations of resources”. According to H. Cole, “Entrepreneurship is the
purposeful activities of an individuals or a group of associated individuals undertaken to
initiate, maintain and aggrandize profit by production or distribution of economic goods and
services”. This definition states that entrepreneurship is goal-oriented process involving
production or distribution of products and goods. It may be undertaken by person or by group
of persons. According to V.R. Gaikaward, ‘’It connotes innovativeness, an urge to take risk in
face of uncertainties, and an intuition i.e., a capacity of seeing things in a way which afterwards
prove to be true”. In a another view “Entrepreneurship is the process of bringing together
creative and innovative ideas and actions with the management and organizational skills
necessary to mobiles the appropriate people, money, and operating resources to meet an
identifiable need and create wealth in the process.” According to Richma and Copen,
“Entrepreneurship implies more creative, external or open systems orientation. It involves risk-
bearing and relatively dynamic leadership.” Schumpeter defines, “Entrepreneurship is an
innovative function. It is a leadership rather than an ownership.” Other authors have said that
entrepreneurship involves the creation of value, the process of starting or growing a new profit-
making business, the process of providing a new product or service, and the intentional
creation of value through organization by an individual contributor or a small group of partners.
According to Rao and Mehta, “Entrepreneurship can be described as creative and innovative
response to the environment”. According to John Kao, “Entrepreneurship is the attempts to

8. create values recognition of business opportunity, the management of risk-taking appropriate
to the opportunity and through the communicative and management skills to mobilize human
financial and material resources necessarily to bring a project to fruition.” This definition
recognizes that entrepreneurship involves the fusion of capital technology and human talent to
complete a project successfully and with reasonable degree of risk. According to Howard W.
Johnson, “Entrepreneurship is a composite of three basic elements-invention, innovation and
adaptation”. In the words of W.N. Loucks, “Entrepreneurship is a mixture of willingness to take
risks, a desire for income and prestige, the urge for self-expression, creativeness, and
independence with a dash of the gambling spirit and possibly additional subtle psychic
components”. John J.Kao has developed a conceptual model of entrepreneurship. This model is
presented in Figure 1.2 on the next page.
CHARACTERISTICS OF ENTREPRENEUR
As manager and leader, the entrepreneur is one of the characters which strongly influences
business around the world including in each country. This explains the need to understand the
profile of such a character, characteristics and mode of action in situations they face. In general,
an entrepreneur is a person who creates new business, taking risks in achieving the objectives
which they propose to make profits and growth by identifying some important opportunities.
Entrepreneur manages important resources, which draws from different sources on a major
power to persuade those who hold them.
Many experts have sought to understand and describe the personality of the entrepreneur,
because; although many people have good ideas to start a business, but some turn these ideas
into concrete business, becoming entrepreneurs. Entrepreneur is "a person with leadership,
which take risks to exploit certain opportunities, are based more on their forces, develop its
strategy based almost entirely by personal interests”. Entrepreneurs have the ability to provide
development opportunities, preventing them some changes may occur in the environment,
which seeks to exploit the personal interest. Research has revealed several characteristics of
entrepreneurs, including: ƒ confidence in personal abilities, due to optimism that demonstrate
success when targeting, which many times but can also lead to failure; ƒ the desire for
immediate results, which causes them to continuously monitor the results, which will confirm
whether they have done right or wrong; ƒ preference for a moderate risk, which means they
face no risk in any circumstances, but a calculated risk, but nevertheless in the eyes of others
may seem like an impossible goal; ƒ willingness to assume responsibilities, preferring to control

9. their own resources to achieve their objectives; ƒ high energy, above average, which allows him
to make incredible effort needed to start a business, business creation; ƒ vision to enable the
discovery times discovery future opportunities, not to meditate on the successes or failures
that have passed; ƒ organizing skills, which allows entrepreneurs to put together people who
carry out certain tasks, to combined so as to implement the vision; ƒthe desire to achieve,
above money making entrepreneur motivation is more complex, expressing the first urge to go
further, to do for others is impossible, the money represents only a confirmation of success ; ƒ
high level of commitment, which makes them hard to work for a company that creates success,
removing barriers that seem insurmountable to others; ƒ tolerance of ambiguity, as an absolute
necessity entrepreneurs, who often must make decisions based on uncertain information, or
even contradictory; ƒ flexibility, which is the ability of entrepreneurs to adapt to changing
customer demand, is an important characteristic of entrepreneurs.
What are the personal characteristics required to be a successful entrepreneur? Before making
the personal sacrifices required to start and build a major enterprise, would-be entrepreneurs
should engage in serious soul searching to be sure they have what it takes to thrive in the
toughest jungle of the business world. To assist in this introspection, the following guidelines
have been prepared by principals of Venture Founders Corporation (VFC). Founded in 1970 to
design and apply new approaches to venture development and financing, VFC serves investor
clients both in the United States and in the United Kingdom. These clients have committed
capital to funds that finance new and young ventures that are found, evaluated and assisted by
VFC. Venture capitalists say they prefer a grade A entrepreneur with a grade B business idea to
a grade B entrepreneur with a grade A idea. And it is generally a strong management team, not
a lone entrepreneur that they back. With that in mind, there are some initial questions that
would-be entrepreneurs must consider: Do I have adequate commitment, motivation and skills
to start and build a major business—to be a successful entrepreneur? Does my management
team have the necessary skills to enable us to succeed in building a particular venture? And
finally, do I have a viable idea? If these questions can be answered affirmatively, then it may be
wise to consider developing a business plan and beginning a search for venture capital. This,
however, is only the first step of the entrepreneurial self-examination process.

10. NATURE OF ENTREPRENEURSHIP
The main characteristics of entrepreneurship are given below:
1. Economic Activity: Entrepreneurship is primarily an economic activity because it involves the
creation and operation of an enterprise. It is basically concerned with the production and
distribution of goods and services and optimally utilizes the resource towards productive use.
2. Entrepreneurship Involves Innovation: Entrepreneurship involves changing, revolutionizing,
transforming, and introducing new approaches. Entrepreneurship is an innovative function as it
involves doing things in a new and better way. Innovation may take several forms, such as a
new product, a new source of raw material a new market, a new method of -production, not
yet applied in a particular branch or, manufacturing etc. Drucker says, “Innovation is the
specific instrument of entrepreneurship”. Entrepreneur is a change agent.
3. Goal-oriented Activity: The entrepreneur who creates and operates enterprises seeks to
earn profits through satisfaction of needs of consumers; hence, entrepreneurship is a goal-
oriented activity. Entrepreneurship emphasizes results, achievements and targets achieved. It is
work done not imaginary plans or paper decisions. Hence entrepreneurship is a goal oriented
activity.
4. Value Creation: Next, we find that the process of creating value is a characteristic in
describing entrepreneurship. Through entrepreneurship, new products, services, transactions,
approaches, resources, technologies, and markets are created that contribute some value to a
community or marketplace. We can also see value created when, through entrepreneurship,
resources are transformed into outputs such as products or services. During this transformation
process, value is created because the entrepreneur is fashioning something worthwhile and
useful. Drucker says, “Until entrepreneurial act, every plant is a seed and every mineral just
another rock”.
5. Enterprise Creation: The next characteristic of entrepreneurship is enterprise creation. In
order to pursue the perceived opportunities for innovation and to create value, there must be
organized efforts and actions. Someone must take the initiative to do something – take action
to get the entrepreneurial venture up and running. Entrepreneurship is a creative response to
changes in the environment. It involves innovation or introduction of something new or
improved. An entrepreneur is an agent to effect change.
6. A Function of Risk Bearing: Risk is an inherent and inseparable element of entrepreneurship.
An entrepreneur works under uncertainties and he assumes the uncertainty of future. In the
pursuit of profit, there is possibility of loss also.

11. 7. Entrepreneurship Implies Growth: The next characteristic in entrepreneurship is growth.
One major difference between entrepreneurial ventures and other small businesses is the
emphasis on growth. Entrepreneurship is about growing a business and pursuing opportunities
as they arise. It’s not about standing still or being content to stay in one market or with one
product.
8. Managerial Skill and Leadership Function: Managerial skill and leadership are the most
important facets of entrepreneurship. An entrepreneur must have the ability to lead and
manage. He provides direction, create work culture, and build teamwork and cohesiveness
among employees.
9. Recognition that it is a process: The characteristics commonly found in entrepreneurship is
the recognition that it is a process, very simply, is a set of ongoing decisions and actions.
Entrepreneurship is not a one-time phenomenon; it occurs over time. It involves a series of
decisions and actions from initial start-up to managing the entrepreneurial venture.
10. Gap Filling Function: The gap between human needs and the available products and
services filled by entrepreneurship. An entrepreneur determines the needs of people and
combines resources to produce goods and services of requirements. He introduces new
products and services, new methods of production and distribution, new sources of inputs and
new market s for this purpose.
11. Dynamic Process: Entrepreneurship is a dynamic function. Entrepreneur thrives on changes
in the environment, which bring useful opportunities for business. An entrepreneur deals
proactively with changing markets and environment. He looks at the changes as the source of
market advantages, not as a problem. Uncertainties are market opportunities for him. He
capitalizes on fleeting marketanomalies.
12. Uniqueness: Other characteristic found in entrepreneurship is that of uniqueness.
Entrepreneurship involves new combinations and new approaches with which entrepreneurs
are willing to experiment. Through Entrepreneurship unique products are created and unique
approaches are tried. Entrepreneurship isn’t merely imitating what others have done. It’s doing
something new, something untested and untried – something unique.
13. Organizing Function: It is the ability to bring together productive resources of society.
Entrepreneur coordinates and control the efforts of all the persons engaged in his enterprises.
He harnesses land, labour, capital and other resources of for the benefits of mankind.
Therefore, an entrepreneur is called as an organization builder.
14. Essential in Every Activity: Entrepreneurship is required in all types of businesses – small or
big, trading or manufacturing or service industry. It is essential for every business to exist and

12. grow. Drucker says, “Entrepreneurship is by no means confined solely to economic
institutions.”
15. Knowledge-based Practice: Drucker writes, “Entrepreneurship is neither a science nor an
art. It is a practice. It has a knowledge base. He uses his experiences for high achievements. The
enterprising quality is generated after a long practice of risk-bearing behaviour.”
16. Another Characteristics of entrepreneurship is a recognition that entrepreneurship can take
place in both profit and not-for-profit environments. Although we tend to assume that
entrepreneurial activity is geared at making a profit (and we agree that much of it is),
entrepreneurship also occurs in social service agencies, in community arts organizations, or in
other types of not-forprofit settings.
17. Entrepreneurship and Management: Management is the agent through which all
entrepreneurial decisions and plans are implemented. The entrepreneur brings new changes
and improvements through management. To survive and win, the managers must become
entrepreneurial in their approach and tasks.
18. Other Characteristics :
(1) It relates to updating of knowledge relating to entrepreneurship promotion on a regular
basis.
(2) It aims at development of skills ad capabilities in identifying latent entrepreneurial traits of
entrepreneurs.
(3) It is a means of rapid economic development which is likely to result in creation of gainful
employment in society.
(4) It believes in the fact that entrepreneurs are not born, they can be created. In the light of
this, large numbers of Entrepreneurship Development Programmes are conducted to promote
entrepreneurship in the country.
(5) It optimizes the use of resources by arriving at the most productive combination that will
provide the society the need goods and services.
Thus, entrepreneurship is multi-dimensional concept. It is both the science as well as art. But is
more an art than science as there are very few ground rules or principles that can be used to
create and run business enterprises in a fat changing and heterogeneous environment.

13. Entrepreneurship has many functions to perform and roles to play in every type of economy.
Entrepreneurship is the life blood of any economy and it applies more to a developing economy
like India. It influences a number of areas such as innovation, job creation, career alternatives
etc. The contribution of entrepreneurship lies in the following areas:
1. Innovation: Innovating is a process of creating, changing, experimenting, transforming and
revolutionizing. Innovation is one of the key distinguishing characteristics of entrepreneurial
activity. The passionate drive and intense hunger of entrepreneurs to forge new directions
products and processes and to take risks set in motion a series of decisions that lead to the
innovations that are important for economic vitality. Without these new ideas, economic,
technological, and social progress would be slow indeed. The “creative destruction” process of
innovating leads to technological changes and employment growth. Entrepreneurial firms act as
these “agents of change” by providing an essential source of new and unique ideas that might
otherwise go.
2. Job Creation: We know that job creation is vital to the overall long-term economic health of
communities, regions, ad nations. Entrepreneurial ventures play very important role in it. Small
business create more jobs than large business do. During economic recession, when large
companies are on their way to retrenchment of their work force, individuals whose jobs are
eliminated find employment with small business. The creation of jobs by small businesses is
expected to continue into the future as new firms start small and grow.
3. Number of New Start-ups: All businesses whether they fit the definition of entrepreneurial
or not – at one point in time were start-ups, the most convenient measure we have of the role
that entrepreneurship plays in this economic statistic is to look at the number of new firms over
a period of time. The assumption that we have to make, then, is that some of these new firms
engage in activities that are entrepreneurial in nature. The next important function of
entrepreneurship is starting the venture. In fact, entrepreneurs identify opportunities and
possible competitive advantages. They set goals and strategies. Pursuit of entrepreneurship
contributed to the overall creation of new firms. Why is the creation of new firms so important?
It’s important because these new firms contribute to economic development through benefits
such as product-process innovations, increased tax revenues, societal betterment, and job
creation.
4. Opportunity to Contribute to Society and Be Recognized for Your Efforts: Often, small
business owners are among the most respected and most trusted members of their
communities. Business deals based on trust and mutual respect are the hallmark of many
established small companies. These owners enjoy the trust and recognition they receive from
the customers they have served faithfully over the years. Entrepreneurship often deals with the
difficult issues of social responsibility and ethical problems. Entrepreneurship produces such

14. goods and services that protect consumer health and global environment and helps in creating
better living conditions in society. It generates employment and conserves natural resources,
balances growth in the country and provides more amenities to people. Ethical considerations
also play a role in decisions and actions of entrepreneurs.
5. Path of Creating Tomorrow: Peter Drucker Says, “Entrepreneur has to seek off yesterday and
to render obsolete what already exists and is already known. He has to create tomorrow.
Making the business of tomorrow cannot be a flash of genius. It requires systematic analysis
and hard, rigorous work today·. The specific job of entrepreneurship is to make today’s
business capable of making the future, of making itself into a different business”.
6. Entrepreneurship Provides an Opportunity to Make a Difference and Create Your Own
Destiny: Increasingly, entrepreneurs are starting businesses because they see an opportunity to
make a difference in a cause that is important to them. Entrepreneurs are finding ways to
combine their concerns for social issues ad their desire to earn a good living. Owning a business
provides entrepreneurs the independence and the opportunity to achieve what is important to
them.
7. Entrepreneurship Serve Small Markets With New Technology: Large firms, with their
crippling overheads, do not find it profitable to serve small populations. This is where small
entrepreneurial firms serve an invaluable role by providing specialized products to niche
customers. Entrepreneurial firms are usually faster to come to the market with radical new
technologies. Ultimately, this will lead to a better standard of living for the whole society.
8. Entrepreneurship Provides Opportunity to Reach Your Full Potential and Reap Impressive
Profit: Too many people find .their work boring, unchallenging, and unexciting, but not
entrepreneurs. To them, there is little difference between work and play; the two are
synonymous. Entrepreneurs’ businesses become their instruments for self-expression and self-
actualization. They know that the only boundaries on their success are those imposed by their
own creativity, enthusiasm, and vision. Although money is not the primary force driving most
entrepreneurs, the profits their businesses can earn are an important motivating factor in their
decisions to launch companies. Most entrepreneurs never become super-rich: but many of
them do become quite wealthy.
9. Other Contribution:
 Entrepreneurship in small businesses helps in distribution of products of large business. They,
thus, support the large business houses. It offers business avenues to women and minorities.
Women and minorities are allowed the benefit of financial independence and a chance to
exhibit the ability to manage business enterprises.

15.  Dispersal of economic activities to different sectors of economy and identifying new avenues
of growth.
 Improvement of the standard of living of different weaker sections in the society.
 Bring socio political change in the society.
 Develop technological know-how.  Improve culture of business and expand commercial
activities.
 Entrepreneurship acts as a change agent to meet the requirements of the changing markets
and customer preferences.
 Develop a culture of achievement orientation.
 It helps in bringing about change and development of the civilization through change in trade,
comment be and industrialization.
 It arouses the need for achievement in individuals which brings about a change in the
economic scenario through economic development and growth.
 It results in exploitation of economy’s resources, such as labour, capital and technology to the
fullest extent.
WHAT MAKES SOMEONE AN
ENTREPRENEUR
Who can become an entrepreneur? There is no one definitive profile. Successful entrepreneurs
come in various ages, income levels, gender, and race. They differ in education and experience.
But research indicates that most successful entrepreneurs share certain personal attributes,
including: creativity, dedication, determination, flexibility, leadership, passion, self-confidence,
and “smarts.”
• Creativity is the spark that drives the development of new products or services or ways to do
business. It is the push for innovation and improvement. It is continuous learning, questioning,
and thinking outside of prescribed formulas.
• Dedication is what motivates the entrepreneur to work hard, 12 hours a day or more, even
seven days a week, especially in the beginning, to get the endeavor off the ground. Planning
and ideas must be joined by hard work to succeed. Dedication makes it happen.

16. • Determination is the extremely strong desire to achieve success. It includes persistence and
the ability to bounce back after rough times. It persuades the entrepreneur to make the 10th
phone call, after nine have yielded nothing. For the true entrepreneur, money is not the
motivation. Success is the motivator; money is the reward.
• Flexibility is the ability to move quickly in response to changing market needs. It is being true
to a dream while also being mindful of market realities. A story is told about an entrepreneur
who started a fancy shop selling only French pastries. But customers wanted to buy muffins as
well. Rather than risking the loss of these customers, the entrepreneur modified her vision to
accommodate these needs.
• Leadership is the ability to create rules and to set goals. It is the capacity to follow through to
see that rules are followed and goals are accomplished.
• Passion is what gets entrepreneurs started and keeps them there. It gives entrepreneurs the
ability to convince others to believe in their vision. It can’t substitute for planning, but it will
help them to stay focused and to get others to look at their plans.
• Self-confidence comes from thorough planning, which reduces uncertainty and the level of
risk. It also comes from expertise. Self-confidence gives the entrepreneur the ability to listen
without being easily swayed or intimidated.
• “Smarts” consists of common sense joined with knowledge or experience in a related
business or endeavor. The former gives person good instincts, the latter, expertise. Many
people have smarts they don’t recognize. A person who successfully keeps a household on a
budget has organizational and financial skills. Employment, education, and life experiences all
contribute to smarts. . Every entrepreneur has these qualities in different degrees. But what if a
person lacks one or more? Many skills can be learned. Or, someone can be hired who has
strengths that the entrepreneur lacks. The most important strategy is to be aware of strengths
and to build on them.

17. ENTREPRENEURSHIP AND ECONOMIC
DEVELOPMENT
Let’s try to look at what entrepreneurship contributes towards economic development. The
role of entrepreneurship in economic development varies from economy to economy
depending upon its materials resources, industrial climate and the responsiveness of the
political system to the entrepreneurial functions. The entrepreneurs contribute more in
favorable opportunity conditions than in the economies with relatively less favorable
opportunity conditions. Entrepreneurship constitutes an important input in the process of
economic development. It channelizes resources, capital and men for economic growth. It is the
best a1ternate to over the problem of unemployment and poverty: It manages growth. J.A.
Timmons has remarked, “It creates and builds something from practically nothing. It takes
calculated risks. It is the knack for sensing an opportunity where others see chaos contradiction
and confusion. It is the know-how to find, and control resources and to make sure that the
venture does not run out of money when it is needed most”. Robert Ronstadt writes,
“Entrepreneurship is the dynamic process of creating incremental wealth.” According to
Schumpeter, economic development consists of “employing resources in a different way”,
bringing in a new combination of means of production. The entrepreneur looks for ideas and
puts them into effect for economic development. Entrepreneurship has great importance in
various economic systems. It is all the more important under capitalism - and mixed economy
where not only the responsibilities of entrepreneur in production and distribution are
recognized but the objective of growth of business and profit maximization is also attained.
Therefore, the importance of entrepreneurship stands beyond challenge in every economic
system except under socialism where it appears in a different form, yet, entrepreneurship
prevails in all economic systems in one form or the other. Resource mobilization of capital and
skill which might otherwise remain unutilized. Entrepreneurship contributes in economic
development in following ways:
1. Increasing Income and Per Capita Income: Entrepreneur brings in new products and services
and develops new markets for growth of economy thus increasing gross national product as
well as per capital incomes of the people in the country. The role of entrepreneurship in
economic development involves more than just increasing per capita output and income; it
involves initiating and constituting change economic growth depends on the rate of applied
technical progress (i.e., innovation) and rate of technical progress in the economic field which in
turn depends on the supply of entrepreneurs in the society. Thus the entrepreneur is the agent
of change in society.

18. 2. Wealth Creation and Distribution: Entrepreneurial activity leads to value addition and
creation of wealth and capital in the structure of business and society. This change is
accompanied by growth and increased output which allows more wealth to be divided by the
various participants. It provides businessmen with a realistic basis to identify, analyze, and
exploit a business opportunity. It takes most challenging decisions to help towards the building
of a rapid growth and financially sound enterprise WilliamJames says, ‘’It is only through risking
our decisions from one hour to another that we create wealth and capital”. The wealth also
gets distributed to more people and geographic areas, thus giving benefit to larger section of
society.
3. Production Evolution Process: Entrepreneur understands and takes up product evolution
process. This is a process where innovation develops and an entrepreneur commercializes the
new products. Here an entrepreneur combines different technologies and fuses them in to
products and services which turn into marketable items. Entrepreneurs also focus on costs and
efficiency. It asks, “to what results should the resources and efforts of the business be allocated
so as to reach extraordinary productivity and results.
The important role that entrepreneurship plays in the economic development of an economy
can now be put in a more systematic and orderly manner as follows:
 Entrepreneurship promotes capital formation by mobilizing the idle saving of the public.
 It provides immediate large-scale employment. Thus, it helps reduces the unemployment
problem in the country, i.e. the root of all socio-economic problem.
 It promotes balanced regional development.
 It helps reduces the concentration of economic power.
 It encourages effective resource mobilization of capital and skill which might otherwise
remain unutilized.
 It also induces backward and forward linkages which stimulate the process of economic
development in the country.
 Last but no means the least; it also promotes country’s export trade i.e., an important
ingredient to economic development. Thus, it is clear that entrepreneurship serves as a catalyst
of economic development. On the whole, the role of entrepreneurship in economic
development of a country can be best being put as “an economy is the effect for which
entrepreneurship is the cause.”

19. Ritesh Agarwal – OYO ROOMS
Our goal is to change the way people stay away from
home
Ritesh Agarwal (born November 16, 1993) is an Indian entrepreneur and the founder and CEO
of OYO Rooms. At 21, Agarwal is considered to be one of the youngest CEOs in India. Agarwal
started his entrepreneurial journey at the age of 17. He is, supposedly, the first Indian drop-out
entrepreneur to have had a successful run. He is also the first resident Indian to win the Thiel
Fellowship.
Agarwal's story of forming Oravel Stays at the age of 18, and then catapulting it into OYO
Rooms has been widely covered by the media. OYO Rooms, currently, is the largest network of
branded hotels in India. The company operates in more than a 100 Indian cities and has an
inventory of more than 20,000 rooms under its umbrella. It also features among the companies

20. which may become the next start-up unicorns according to CB Insights research's findings,
published in The New York Times.
Agarwal has won many awards and accolades for his work including the Business World Young
Entrepreneur Award. He is a regular speaker at entrepreneurial conferences and institutes
across India and the world.
HISTROY
Agarwal was born on November 16, 1993, in Bissam Cuttack. He was raised in a middle-
class Marwari family. His father works with an infrastructure corporation and his mother is a
homemaker. He has three siblings.
Agarwal went to Sacred Heart School in Rayagada, Odisha. After finishing class 12th, he
enrolled in Indian School of Business & Finance, Delhi. However, Agarwal didn't continue with
his education and dropped out to start his own company without his family knowing of this
move. Agarwal has often talked to the media about how he was scared of his parents getting to
know that he has dropped out of college. In an interview with the Economic Times, Agarwal
said, "When the newspapers started reporting it. My dad came to Delhi and was perplexed to
see the office. It took me a day to convince him. My mom was very unhappy because she felt
who would take me for a groom? You needed to be at least a graduate."
Agarwal has also talked about how he felt that college education could come in the way of what
he actually wanted to do. In a blog post on The Huffington Post Agarwal wrote, "I dropped out
of college within days of joining because I felt that attending classes would slow me down from
doing what I really wanted to do - building my own start-up.
Ritesh is fair, tall, and thin, with an unkempt look about him. Hair all over the place, shabby
beard, dirty nails, dressed in a light blue shirt and dark blue trousers that would have looked
better if ironed—the look of a founder putting in 16 hours a day to make his dream come true.
After all, for a kid who’s dreamt of this from as far back as he can remember, it has been a hell
of a journey getting this far.
The way Ritesh tells it, it is quite a story.
His growing up days in Rayagada, Odisha, were about a lot of fun and learning. And very
different from those of other kids. His family was well-off so Ritesh would get aroundRs.300 in
pocket money every month, even when he was in second grade at the Sacred Heart School.
“Other people’s view was that saving a rupee is a rupee earned,” he says. “But for our family,
earning two rupees is a rupee earned. That means spending that 1 rupee to make that happen
is what it is. It is a difference of risk-taking appetite, going out and doing stuff.”

21. This view of the world ensured that Ritesh had a lot of time to himself. To figure out what’s
inside a floppy disk or a CD. It helped that there was a computer at his father’s office.
“I basically screwed around with the computer tens of times,” he says. “So I would put posters
in the printer when I would not find A4 sheets. A lot of these things are just the opportunity to
make mistakes.”
That’s how he got interested in software. It started with a kite, then a bird and then the hunger
for more. So Ritesh devoured his elder brother’s books. Followed by the school’s curriculum
which ensured that languages like Basic and Pascal were taught. And then Google. He believes
that programming is nothing but application of logic. And once you have that, then you can
seamlessly move across languages.
So software was love. By the time he was in 10th grade, Ritesh knew he wanted to code for a
living. The question was how? His idea: engineers, those who go to Indian Institute of
Technology (IIT), would be coders, right? And where do they go to get into IIT? Kota (the
engineering preparation town in Rajasthan).
But seriously, Kota? For coding?
“See, I did not have anyone I could have asked if I can go to Kota or not,” he says. “No one in my
town had ever gone to Kota. I mean, it was a big deal if people went to Bhubaneswar.”
In 2009, Ritesh left for Kota. His dad picked up the tab for his admission to Bansal Tutorials.
Once there, it didn’t take him long to figure that Kota was anything but a place where you could
learn coding. The dream of coding took a backseat. So did attending coaching classes. Ritesh
had a lot of time. To do just about anything he wanted.
So he wrote a book. The Encyclopedia of Indian Engineering Colleges. He says, “This was like
Princeton Review of India,” he says. “It was big on Flipkart. Sold out. A lot of people have
bought it. I remember the bookshop inside Bansal had this book and my picture was right on
the cover.”
And then events. Yes, that. Kota bored him, so very often Ritesh would take a train and head to
Delhi. There he would stay at odd bed & breakfast (B&B) places and attend events and
conferences to meet entrepreneurs. He couldn’t afford the registration costs so he would just
sneak in.
In May 2011, he moved to Delhi. For good. With the idea of working on a start-up of his own
and preparing for SAT so that he could go to the US for further studies. Money was not a
problem. There were savings from Kota and the pocket money was good; Rs.15,000 a month.
But SAT never happened.

22. After a year of doing really nothing except meeting people and reading about start-ups,
especially Airbnb, in February 2012, Ritesh incorporated Oravel.
“So I was waking up and staying at B&B properties for almost three months. It was a fun time,”
he says. Of course, it was a tough thing starting out. “For a long time, it was just me, Anuj
Tejpal (operations) and a couple of interns, that’s it.”
Was he doing everything?
“Yes.”
When did the first employee join?
“2012 December after the first round of funding came in.” (VentureNursery)
Who was it?
“Sahil Arora, a young Amity guy. He was one of the most amazing guys I have worked with. Did
not know how to write an email. But he was the only guy who came in my budget. It
was Rs.8,000.”
Two people! How long before the next hire?
“A month or two months, maybe. Then some interns joined and Anuj came on board. He was
working with ZS Associates before this. So he called our call centre, and back then it was
manned by Sahil. So Sahil just gave the phone to me. That’s how we got him on board.”
How did he find you?
“There was news, right, that Oravel raised funding from VentureNursery. We were doing too
many things at the same time.”
Soon after, OYO happened. Taking a cue from online retail companies, Ritesh felt that Oravel,
too, should have a private label. Some place where they could monitor the customer
experience.
Then early in 2013, the Thiel Fellowship happened. After that, there was no looking back. As
soon as Ritesh got back from the US in July 2013, LSVP and DSG Consumer Partners invested.
And then in May 2014, Sequoia Capital and LSVP. What started out as a one-person company
today employs more than 100 people. It is growing at breakneck speed. People are being added
almost on a daily basis and OYO Stays is venturing into other cities such as Bengaluru and
Mumbai. It is already present in Gurgaon, Noida and Delhi.

23. There is little space left in the cramped office. Ritesh is hoping to shift soon to a larger office in
the same building on the 6th floor, right now occupied by Cap Gemini SA. That the dream has,
in a way, played out can sometimes be frightening.
“It is such an exciting journey that I get overwhelmed,” says Ritesh. “There are so many people
who are dependent on me. You know, setting expectations, and then feeling afraid. But I am a
firm believer in the fact that good work has always been recognized.”
Now that’s one hell of a story.
Or is it?
It would be fair to say that sometimes entrepreneurs like to dress up— the idea, the
projections, the pain of bootstrapping and even the back story—to make it that one perfect
story. One that would make the world sit up and take notice. But sometimes, it helps to dig a
little deeper.
For Ritesh’s story, let’s start with the Asian Science Camp held at TIFR in Mumbai in 2010. While
Ritesh has maintained that he was invited for it or participated in it—he even wrote about it
at http://riteshagar.blogspot.in—the story is a little different. Mint reached out to TIFR to check
if Ritesh was one of the 240 people selected to be part of the camp. No.
“We selected some 30 people from India,” said Sumana Amin, camp secretary of the camp in
2010 at TIFR. “There is no one by the name of Ritesh Agarwal on that list.”
Now, how about the bestselling book? Ritesh has made that claim in interviews, and also while
applying for the Thiel Fellowship. Also, in Oravel’s early days captured from the company’s web
archives: mintne.ws/1xwXVPv
Mint reached out to the publisher, G.K. Publications in Rajasthan. The book was anything but a
bestseller. “Yes, yes, I remember Ritesh,” says Rijita, who works in the sales department at the
company and prefers to use only one name. “The book didn’t do well. Maybe because of us,
because we didn’t push it as much, or the content. We published only one volume of 1,100
copies. Books had come back after a year and we had to send it to the market again.”
Now, what about the company where Ritesh became the youngest CEO in India? Worth Growth
Partners, actually Rational Management Consultancy Pvt. Ltd. The company was registered on
18 February 2011 at Dhulet, Rajasthan, and has two directors; Jagdish Regar and Asish
Agarwal(Ritesh’s elder brother).

24. Mint reached out to VentureNursery (the accelerator where Oravel was incubated) to
understand if Ritesh’s claims and association with Worth Growth Partners had showed up in the
company’s due diligence while he was inducted into the programme.
“No,” said a senior official, who spoke on condition of anonymity because VentureNursery is
still an investor in Oravel. “This is the first time I am hearing about it. See, but youth comes with
passion and immaturity. If something has happened there, then we are not aware of it.”
And then, there is the story of Oravel.
“Talk is cheap. Show me the code”: Linus Torvalds. 2012
Technology is at the heart of any online business. Be it Facebook, Uber or Airbnb. The code,
that is what gives these companies their strategic advantage. So you would almost expect
Ritesh, who loved coding so much, to have built a product—perhaps all by himself or with some
help. And to then acknowledge the person. But in Ritesh’s version of Oravel, there is no
mention of Kunal Pandya, CEO of NCrypted Technologies, a web development company based
out of Rajkot in Gujarat.
The website Oravel.com didn’t start with a kid, a laptop and an idea. It started sometime in
April 2012 when Ritesh reached out to Pandya to buy a product called BistroStays Enterprise
(an Airbnb clone).
There wasn’t enough money, but both agreed to a long-drawn payment structure. Also part of
the agreement was that Oravel would specifically give credit to NCrypted Technologies—a
footer to the website with a hyperlink—“Powered by NCrypted Technologies”.
Except that the Airbnb clone wasn’t enough. Ritesh needed customization. For that Pandya was
willing to work and he did initially, but he needed more money.
“Before that it was just a static page,” says Pandya. “We started working together but right
from the start there were many payment issues.”
This was also the time when Ritesh was out in the market looking for funding. Luckily for him,
VentureNursery, an accelerator founded by Shravan Shroff, former promoter of multiplex chain
Fame Cinema, and Ravi Kiran, former Starcom MediaVest Group South East and South Asia
CEO, was putting together an incubator called ParallelTrack.
Apoorv R. Sharma, executive vice-president at VentureNursery, reached out to him.
“We found a guy with passion and fire in the belly,” says the VentureNursery official quoted
earlier. “He had slept in 20-30 odd B&Bs, sometimes on the floor, and while some of that may

25. be dramatized, we found him confident and assertive. So we thought that with some
mentoring, he could get a chance and fly.”
In April, Ritesh got into the programme. But it came with a condition. He must find a co-
founder.
Enter Manish Sinha. A former advertising guy, having worked at agencies such as JWT, Ogilvy
and Mather and Mudra.
Sinha (with his wife Shilpi) was leading a quiet life in Delhi running a B&B business called
Cinnamon Stays. Ritesh reached out to him to become the co-founder at Oravel.
“When he reached out, he never mentioned anything about VN (VentureNursery),” says Sinha.
“His pitch was—Ritesh’s software and product brain and Manish’s advertising and marketing
brain, if we put it together, we can create a great business.”
Sinha was taken in by Ritesh’s charm and passion. But their arrangement was clear and at the
same time, flexible. No salary, and considering Sinha had a home and an existing B&B business
to run, his role as a co-founder would be limited to ideating and mentoring.
Even as all this was happening, Ritesh was having trouble on the website. So he reached out to
two developers (graduates from Georgia Institute of Technology) in Indore—Mohit
Jain and Chirag Gupta of Codeautomations. On 29 June, Ritesh sent an email to Gupta. They
were interested, but they wanted to mull it over.
The partnership
Around this time, Ritesh and Sinha started working together. Ritesh’s flat in Masjid Moth
became Oravel’s office and with Sinha’s inputs, a hot B&B destination. The idea: a retro
Bollywood theme. “It was more a branding idea from me for Oravel than business. The story of
a 19-year-old CEO of a rental company working from a B&B was the PR pitch,” says Sinha.
In August, Ritesh formally introduced Sinha to the folks at VentureNursery in an email.
“Dear Shravan, Ravi (Kiran)…Manish is inducted as my partner/co-founder in Oravel. We met a
year ago (app July) and became good friends by Nov. He brings with himself huge experience of
Customer Servicing, Operational Expertise (Thanks to him being #1 B&B in Gurgaon) and
Marketing virality.”
While at the time he overlooked this tiny detail, Sinha denies that he knew Ritesh since July
2011.

26. The partnership, though, got the people at VentureNursery excited. It also helped that Kiran,
thanks to his background in advertising, had heard of Sinha. Post-mentoring, training and
networking, part of the VentureNursery incubation programme, in late September both Ritesh
and Sinha travelled to Mumbai to make a pitch to VentureNursery and its set of angels.
The beta product “with search, review and book features (in testing mode)” was Pandya’s
Airbnb clone. Slide 3 had pictures of Sinha’s Cinnamon Stays. Claims of 3,000+ listings and 600+
relationships with B&Bs in Gurgaon and Delhi were significantly dressed-up numbers. In fact, at
the time, Oravel had a relationship with not more than five property owners. The listings were
picked up from various other booking sites and plugged into Oravel.com. But both Ritesh and
Sinha agreed that this is how a pitch is made and that’s how it would be.
VentureNursery bought it.
As Sinha puts it, his brotherly love for Ritesh was at its best in September 2012. First, he
designed the company’s brand identity, a brown teddy bear. And then when Oravel wasn’t
getting enough bookings on the Internet, he came up with the idea for dial-a-room for non-
hotels. Most important, the idea of OYO, low-cost standardized inns, was his.
In October, after almost two months of due diligence (which included flying down Ritesh’s
father from Bhubaneswar to make sure that he wouldn’t push his son into college anytime soon
and put the venture in jeopardy, VentureNursery put Rs.30 lakh into Oravel.
The news that an 18-year-old had secured seed funding for a start-up was splashed
everywhere.
Oravel grew. Team size? Four. Ritesh, Sinha, Anuj Tejpal (property acquisitions) and Sahil Arora
(one-man call centre).
On 31 December 2012, the last day for filling up the application form, Ritesh applied for the
Thiel Fellowship. Little did he know that his life was about to change.
2013
In February 2013, Jain and Gupta from Codeautomations joined Oravel. In an email to Ritesh,
Jain wrote “…It would be best on interest of us and Oravel to work on Equity + cash model.”
Ritesh was thrilled. He replied, “Awesome Mohit - great to hear back. Looking forward buddy.”
Jain and Gupta then flew down to Gurgaon to formalize the relationship. In a letter dated 28
February, on Oravel’s letterhead, Ritesh welcomed them as part of the core management team.
And offered “approximately 10-8% (1039-855) shares of the paid up capital of the company”.
Plus Rs.25,000 per month for one designer.

27. The same month, Salil Aggarwal, Anuj Tejpal’s roommate and former colleague at ZS Associates,
joined Oravel. “Ritesh would often be at our place to discuss business with Anuj,” says
Aggarwal. “It looked very exciting so when Ritesh and Anuj asked me to join, I was like, sure.”
Aggarwal, too, came on board with a promise of an equity stake in the company. Except, no
documentation and no offer letter.
Over the next couple of months, the team got cracking on the job. Even as all this was
happening, Pandya of NCrypted had been hounding Ritesh for money and for the credit on the
Oravel website which had suddenly gone missing. “A couple of cheques had bounced and
whenever I would call, he would say, I don’t have any money,” says Pandya.
On 6 March 2013, Ritesh raised this issue in an email to Gupta. “Buddy, this guy from Gujrat has
requested us to do the belows…he keeps bugging me with mails for this. In case, it doesn’t steal
our code/database lets paste it and live in peace.”
Then, the big news came. Ritesh had been shortlisted for the Thiel Fellowship and had to fly to
San Francisco for an interview and make a pitch for Oravel. The company went into a tizzy
making preparations. The work of putting together the presentation and making sure that the
website worked on the D-day landed on Jain’s table.
On 7 April, (three days before leaving for the US), Ritesh sent an email to Jain. “…One thing is
pretty urgent –Let’s make the earlier code and database we had on the live site…Until then we
can’t afford to have the 20 under-20 guys take a note of we not having a real product…we can
use the situation to our advantage in the manner of launching the day we have the final
conference (13th).”
Ritesh left for San Francisco on 10 April.
The people at the Thiel Foundation were sold on the passion and vision of a 19-year-old from
India. The claim: 4,000+ listings, 3,000+ happy nights, 200% growth every month, 40+ country
travellers, three members (Tejpal, Gupta and Jain) from top US universities. Both Salil Aggarwal
and Jain say that the numbers are far, far dressed up. Why did they agree to it? Again, because
well, that’s how it is done. Also, Tejpal never went to college in the US.
In May, Ritesh was selected for the Thiel Fellowship. It was big news. Almost overnight, he
became the poster boy of entrepreneurship. VentureNursery arranged for a PR agency for press
interviews.
On 30 May, Ritesh left for the US.
Now back to our story; after Ritesh left for the US, it all went south.

28. Jain and Gupta had been getting a bit jittery. Their offer had still not materialized into a
shareholder agreement. Plus they had been paying the developer (Rs.25,000 per month) from
their own pockets. In an email on 6 June, Gupta sent Ritesh a reminder.
The cracks surface
Two days later, Ritesh replied saying that he had been busy. He promised to close the agreements
soon and send the cheques. “…It’s been amazing working with you guys - look forward to
amazing times coming :)”
In Delhi, Salil Aggarwal was getting worried too. He had been working without a salary, except
for a few reimbursements for rent and office expenses. He often discussed the issue of a stake
with Tejpal but nothing came out of it.
Things took an ugly turn in June. Jain sent a long and terse email to Ritesh, saying that they had
ceased all other work to focus on Oravel. “I need to get some sort of written confirmation by
you on the stake we agreed mutually, i.e. 10 to 8 % (which should have been done earlier)….”
A day later, Ritesh replied saying that he agreed to it “on the face of it” and would send an
“official letter” confirming the arrangement within “next 24hrs”.
Twenty-four hours became a month; the letter never came. The issue was hanging fire in July
when Ritesh got back to Delhi.
He had been busy in the US.
Bejul Somaia, managing director of LSVP, and Ritesh met in the US. In June, Maninder Gulati,
vice-president at LSVP, reached out to Sinha’s wife Shilpi to get her perspective on the B&B
business. She directed him to her husband instead. Immediately, Sinha forwarded that email to
Ritesh with a line, “Are we speaking to Lightspeed guys as well?”
Ritesh didn’t respond.
Gulati, though, got back to Shilpi. On 26 June, he replied, “Thanks Shilpi…we are in touch with
Manish and Ritesh from Oravel. Manish, hopefully we will meet you when Ritesh is back.”
Sinha and Gulati never met.
In the first week of August 2013, Ritesh and Sinha met at Oravel’s office in Gurgaon.
Ten minutes into the meeting Ritesh pushed a paper towards Sinha and asked him to sign it. He
then excused himself and stepped out. Sinha picked up the paper, thinking it must be a bill or
something. But as he read it, the colour drained from his face. “The document stated that I

29. would sell all my shares to Ritesh,” says Sinha. “I was furious. I just flung the paper on the table
and walked out.”
Later in the day, Ritesh called Sinha to apologize and explain the situation. He blamed
VentureNursery, says Sinha. “He told me that if I didn’t sell my shares immediately, I would not
get any money. And that he was trying to get me a good deal.”
After what had happened, Sinha was depressed. He discussed the issue with his wife. Both
concluded that the relationship had hit rock-bottom, and if this was what Ritesh and
VentureNursery wanted, then he should move on. Sinha did not reach out to VentureNursery to
clarify or discuss this matter, a decision he now regrets. “At the time, I was thinking that I
wanted some money for the work I had put in for over a year and not zero money.”
On 10 August, a few days after the argument, Ritesh emailed Sinha an apology. “I apologize for
the manner in which I carried out the conversation. I did make a grievous mistake…but I am
here to set right and I will do all to make sure we reach that.”
On 13 August, Ritesh prepared a document and named it Oravel-Manish Closure.
The same day, he signed a term sheet for funding with LSVP.
On 16 August, Sinha entered into an agreement to sell his stake (10.15%) to Ritesh. For Rs.28
lakh. Sinha had absolutely no idea about the term sheet with LSVP. “All I can say is Ritesh forced
me to sell all my shares without disclosing the price and the valuation that he was getting,” says
Sinha.
VentureNursery claims it had no clue what was going on. After a month of Sinha being booted
out, on 19 September Ravi Kiran and Shravan Shroff sent an email to Ritesh.
“Ritesh, we have reviewed the document you sent us on Aug 30 titled ‘Oravel-Manish closure’,
which appears to have been created on Aug 13 and which has got a receipt by Manish on Aug
16, along with a cheque for Rs.200000. This is three days before you wrote to us about the fact
that you had signed a term sheet with LSVP. We find this highly unusual, and in clear
contravention of the SHA (shareholder agreement) both of you have signed with the investors.
…we call upon you to provide us with a clear explanation of the background to this
development and the current status. You told us during our call that LSVP would like Manish to
exit to create place for another co-founder with franchising experience. Yet you seemed to
have agreed on an exit plan for Manish before LSVP made any investment and without any
approval from existing investors.

30. The existing investors have always been under the impression that Manish has been 100%
dedicated to Oravel and had agreed to invest with that condition. Can you please explain when
that dedication got diluted and why didn’t think worth your while to seek approval?”
An anomaly in the system?
Whatever the explanation Ritesh came up with, it was enough for VentureNursery .
“Till this day I had no idea that all of this happened,” says Sinha. “I can see that he told me one
thing and VN another. All I can say is that he fraudulently forced me to sell my shares.”
And while Sinha’s exit may not have been what in investing lingo is called condition precedent,
at least on paper, an LSVP executive admits that it may have been the firm’s idea.
In an interview on 20 November, LSVP’s Somaia said that as part of diligence, LSVP met with
Ritesh, a few employees and some property owners to understand the dynamics in the
company. “We did not meet Manish,” he says. “Because part of what our background checks
revealed that Manish wasn’t really a driver of the company.”
In fact, Somaia says that Sinha’s co-founder status has a lot to do with something of an anomaly
in the Indian start-up ecosystem. So where in the US, co-founders are actually people who have
founded the company, in India, people who have been hired early would also be called co-
founders.
“We went to property owners and asked them who is OYO to you?” says Somaia. “We heard
Ritesh, Anuj, but not Manish.”
“So we boarded up with Ritesh. So what’s the relationship here and how is it going to work. And
he and Manish had conversations even prior to that and I won’t get into all of this. So our point
to Ritesh was simply, hey look, if this relationship is not going to be one that goes forward...I
don’t think it was a CP technically, I haven’t read the legal documents. So we must have said it
is better to address all of that now and you would like to have clarity. That this is all addressed
before we invest, right!”
Even as all this was happening, nobody at Oravel had any clue. In fact, stressed by their own
issues, Jain, Gupta and Salil Aggarwal got on to a conference call early in September 2013. Its
outcome was simple.
On 24 September, Jain and Gupta quit. They sent out a long email to everyone at Oravel saying
they were quitting because even after eight months they hadn’t “received our paper work and
shareholder agreement”. On the one hand, the company claimed it had money from “VN, Theil
and now LSVP” and, on the other hand “we don’t receive any” money, they wrote.

31. Starting 25 September, Salil Aggarwal stopped going to work. A few days later, four other
people quit the company.
‘Day in, day out’
In an emailed reply to a follow-up question, Ritesh said, “Frankly at one point of time the
previous Model (Oravel) wasn’t working and we needed to find a new direction in the business
and which didn’t work for some of the employees. We of course respected their decision to
move on. Many others decided to stay back and I am proud to see them leading many parts of
our business today.”
Did the exits at Oravel show up as a red flag for LSVP?
No.
Somaia says this is a matter-of-fact situation in the start-up world. “Perhaps this is new for you,
but we breathe this day in, day out,” he says. “To me that is start-ups. They are living
organisms. What’s the churn in start-ups? It’s insane. I don’t think there is anything particularly
unusual about the churn you are referring to.”
How about VentureNursery? Did they bat for the employees?
“Nobody escalated this to us,” says the VentureNursery official quoted earlier. “But then our
only point of contact was Ritesh and we do not interfere in an entrepreneur’s day-to-day
operations.”
And then he explains a little more: “Did we set out to build a successful business? Yes. All of us
made 20X on our original investment. Did we set out to build character? Yes and No. Yes
because you know it is a part of institution building. No because you think it is already there.
We had no reason to suspect.”
To give credit where it is due, Oravel is on to something good. It has a charismatic 21-year-old
founder at the helm. And the company has captured the imagination of some of the biggest
venture capital firms in the country. So much so that in less than 10 months, the period
between LSVP and Sequoia’s investment, Oravel’s pre-money valuation rose from Rs.14 crore
to Rs.360 crore.
What changed on the ground, in just 10 months, to merit such valuation? “Obviously the
company has made progress. More hotels now than they had. More substance in team. But
why do Flipkart’s valuations change 2X in 3 months? It is not because of something
fundamental,” explains Somaia.

32. “The business grew,” he adds. “So it currently has somewhere between 40-45 properties. When
we invested it had five, maybe. But remember rule 1, venture investors always over-pay for
companies because they are buying into the future. It is an unfortunate aspect of our business
but it is the reality. The math doesn’t work.”
Ritesh Agarwal's journey from being a SIM-seller
to the helm of OYO Rooms
When Ritesh Agarwal walked into a meeting with venture investor Bejul Somaia last year, his
rucksack attracted immediate attention. Curious as to what the young entrepreneur was carting
around, Somaia asked him about it and was amazed to hear the answer. For Agarwal, who left
home in Odisha as a teenager to seek his fortune, carrying all his possessions wherever he went
was second nature. And now, as cofounder of an online aggregator of budget hotel rooms,
checking into a new room every night was also business. "It helps me get a pulse of what
customers and hotel owners want and also gives me the convenience of not maintaining a
home," says the itinerant founder whose startup, OYO Rooms, has recently raised funds from
Japan's SoftBank.
Some four years after he landed in Delhi, Agarwal, who once sold SIM cards in his hometown,
has built one of the most valuable Internet startups in India by a college dropout.
The hands-on approach is a big reason why Agarwal has been able to aggressively ramp up OYO
Roomsfrom five cities in December 2014 to 73 cities now.
"He has a very strong grip on all the levers of the business. In five minutes he can go from a
strategic conversation to drilling down into the minute details important to a property owner,"
said Somaia, whose firm Lightspeed invested in OYO in January 2014. Agarwal, hailing from a
business family, moved to Delhi in 2011 to start his entrepreneurial journey after deciding to
skip engineering college entrance exams. He had also briefly enrolled in University of London's
India campus. It was when he was 18 that he founded Oravel Stays, which was building the
Indian version of home sharing portal AirBnB. Agarwal got in touch with accelerator Venture
Nursery, flew down to Mumbai and got seed funding of around Rs 30 lakh after a three-month
programme. Agarwal, who stayed at over 100 bed-and-breakfast rooms while running Oravel,
soon discovered that the problem for these portals was not discovery. "The big problem was
that these portals are not standardised," said Agarwal.

33. It was around the same time that Agarwal became the first Indian to be chosen for Thiel
Fellowship, where he was given $100,000 grant by early Facebook investor and PayPal
cofounder Peter Thiel. The fellowship is given to entrepreneurs below 20 years of age who skip
college for two years to start running their own business. "One big learning from Thiel
fellowship was think really big and create an impact, without thinking if anybody has done it
before," said Agarwal, who decided to pivot the model to OYO Rooms, putting most of the Thiel
grant into the business. And investors feel that Agarwal has the maturity to build an
organisation and execution capabilities. "I always thought Ritesh was unusual for his age (or any
age) in terms of his clarity of thought and purpose. He embraces the concept of hiring people
better than him and giving them the freedom to contribute," said Somaia, adding that
experienced founders also struggle with this.
OYO Rooms is a branded network of hotels in India. OYO Rooms currently operates in more
than 120 Indian cities including Delhi, Gurgaon, Jaipur, Mumbai, Bangalore, Hyderabad, Goa,
Chennai, Kolkata and others. OYO is present in major metros, regional hubs, leisure
destinations and pilgrimage towns. According to a research carried out by CB Insights for The
New York Times, OYO Rooms is among the companies that may be the next start-up unicorns.
The company is backed by investors like the Softbank Group, Greenoaks Capital, Sequoia
Capital and Lightspeed India. OYO Rooms provides standardized hotel rooms with features such
as an air-conditioned room, complimentary breakfast and Wi-Fi with 24x7 customer service
support. Guests can use the OYO Rooms App for booking rooms on the go. They can also order
beverages and request room service through the app. Hotel owners who partner with OYO
Rooms are connected via world’s first tablet based property management App and become part
of the OYO brand.
Why A 21-Year-Old Is Building OYO
Ritesh Agarwal’s online marketplace for affordable stays, OYO Rooms, received $100 million in
funding from SoftBank earlier this week. Agarwal is 21, and demographically aligned to a
youthful country full of young entrepreneurs. Using technology and standardization, he is
building what is one of the few non-copycat startups in an India with many Uber and Amazon
imitators. OYO Rooms currently offers 14,000 rooms in 80 cities. His closest branded hotel
competitor is India’s iconic Taj Hotels, run by conglomerate Tata’s Indian Hotels, whose current
inventory of about 9,000 rooms, albeit in the upper end of the hospitality segment, is to double
soon.

34. The two-year-old OYO is Uber-like and not an Airbnb imitator for several reasons. In India, the
problem of finding affordable accommodations is massive. The challenge is not discoverability,
which is what startups like Airbnb address. Rather it is the lack of predictability in hotel stay
experiences that Agarwal is tackling.Travelers are all too familiar with nightmarish encounters
in standalone hotels in India. Contrary to promises, guests arrive to ramshackle buildings,
missing signage, leaky washrooms, torn mattresses, unclean floors, sputtering air-conditioning,
non-acceptance of credit cards and so on.
“No Indian traveler deserves to stay in those kinds of places, no matter what he pays. It is this
trust deficiency that OYO is trying to combat,” says Ritesh Agarwal who says the potential for
branded hotels is huge. About 415 million Indians undertake a journey every year, he says.
So, quite like the predictably timely service offered by Uber, OYO hotels pledge to provide
standardization on 30 measures in each room including free wifi and breakfast, flatscreen TVs,
spotless white bed linen of a certain thread count, branded toiletries, 6-inch shower heads, a
beverage tray and so on. The standards are audited every few days so that every customer is
assured a quality experience. OYO’s budget stays range from 999 rupees (about$16) to 1,500
rupees ($25) while its midscale rooms are priced at 1,600 ($26) to 4,000 rupees ($66). OYO
provides asset owners with support such as quality standardized supplies and service training.
Agarwal, a college dropout and the first Asian to graduate as a Thiel Fellow (the Thiel
Fellowship backed by PayPal founder Peter Thielrequires its Fellows to drop out of school) says
his is an original business model. “We are not building an Indian alternative to what has been
attempted in the Silicon Valley or China.”
India’s affordable travel segment is suddenly afire with a flurry of investments into OYO-like
players. For instance, Bangalore-based hotel marketplace Treebo, started up by three founders
including two former McKinsey executives just three months ago, received $6 million in venture
capital from investors including Matrix Partners and SAIF Partners. Budget hotel, homestay and
guest house aggregator StayZilla raised $20 million from Nexus Venture Partners and Matrix
Partners. This month, low-end hotels aggregator ZO Rooms received $30 million from Tiger
Global among others.
Treebo’s co-founder Sidharth Gupta says the supply in India’s unorganized hotel sector
(unbranded, standalone hotels) is an estimated million rooms. While many travel portals
aggregate and provide the convenience of online booking, they have not solved the problem of
quality assurance. “We offer clean and fresh rooms and a 30-minute service guarantee for any
irritants,” says Gupta whose brand will aggregate 21 hotels in four cities by this month end. It is
ramping up rapidly. He estimates the hotel market potential at $10 billion. “When guests get

35. access to the dignified accommodation they deserve without having to burn a hole in their
pocket, it will unlock a new set of travelers,” says Gupta.
India is a large market, geographically, as well as a diverse market. As Indians’ spend basket
grows, demand for hotel accommodation is surging like never before. “In smaller towns, people
check into OYO hotels when power supply goes down at their home – our hotels guarantee air-
conditioning; younger Indians check in to budget hotels because they don’t want to go home
drunk (to their parents). There are ever-increasing types of hotel consumption in India” says
Kavikrut (who goes by a single name), head of expansion at OYO. Demand spikes when cities
host cricket matches, for instance.
Data science is at the heart of operations at OYO which started with one hotel in Gurgaon, in
the suburbs of India’s capital New Delhi in 2013. Gurgaon is also its base. All transactions at its
hotels, such as check-ins, check-outs, audits of the toiletries in the room, are done through its
app loaded on a tablet. The app also enables a single-click reconciliation at the end of the
month with over 600 variables (like check payment, cash, corporate rate and so on). Scientific
algorithms decide pricing. Data science helps highlight areas with high demand. This month the
startup will book 400,000 room nights.
OYO’s early investors include Sequoia Capital, Lightspeed India and Greenoaks Capital. Growth
is fast paced and OYO added 43 cities in July and will add another 50 cities this month. Kavikrut
says the OYO brand will offer 50,000 rooms in 200 cities by the year-end and grow to 500,000 in
the next two to three years.
SoftBank leads Rs 630cr funding in Oyo Rooms
Budget hotel aggregator Oyo Rooms has raised $100 million, or Rs 630 crore, from Japanese
telecoms and internet major SoftBank as reported first by TOI on May 18. Oyo, founded by 21-
year-old college dropout Ritesh Agarwal, is the largest player in the fast growing hotel
marketplace category which has seen frenetic investor activity in the past few months. This
would be SoftBank's fourth investment in India after Snapdeal, Ola and the controversy-ridden
realty portal Housing. Oyo's existing investors Greenoaks Capital, Sequoia Capital and
Lightspeed India also participated in the third round of institutional funding for the two-year-
old startup, which has in all raised $125 million in less than a year.
Oyo's competitors have been rounding up early-stage funds as the sector hots up. While Zo
Rooms raised $5 million from Tiger Global and Orios Venture Partners, Matrix Partners and SAIF
Partners pumped $6 million in Treebo, formerly Zipotel, and Accel Partners and Qualcomm
Ventures have together funded Fabhotels.

36. Agarwal said that the $100-million funding will be used towards developing new technology
products and expanding across new cities as well as going deeper into current markets. "Our
long-term plan is to be present in 250 cities across the country with 5,00,000 rooms. We are
extremely encouraged by our growth and are currently at a run rate of 4,00,000 booked nights
per month," Agarwal said. These are booked nights and include cancellations that are currently
the lowest in the industry, he claimed.
Oyo claims to be present across 80 cities with 13,000 budget hotel rooms on its platform based
on the asset-light marketplace model made famous by Uber and Airbnb. Starting at moderate
charges of Rs 999 per night, hotel owners that partner with Oyo see a significant spike in
occupancy levels, the aggregator say.
In March this year, the company had raised $25 million from Greenoaks Capital, an investor in
e-commerce major Flipkart, with existing investors also participating. Agarwal, who was chosen
for the prestigious Peter Thiel fellowship, aims for Oyo to become the largest technology-
enabled network of hotels in the world.
Conclusion
OYO Rooms, the company partners with property owners across India and makes sure that
their facilities meet a baseline of requirements from linen quality to breakfast to Internet
access for a starting price of 999 rupees or $16 a night. The company, which has booked around
60,000 stays (Update: per month) since starting almost two years ago, works with each partner
hotel to improve their facilities over the span of a week before launching on the platform.
While other tech companies like Airbnb also have a growing footprint across the country,
Agarwal says that the Indian short-term rental market needs to guarantee a basic quality level
that a ratings or reviews system meets only some of the time. While the U.S. and other
European countries have long had chains like Best Western or Ibis, he argues that the Indian
budget hotel market is still lacking in this area.
He compares Airbnb to a Sidecar-like model while OYO has a more Uber-like approach where
they focus on instant gratification and minimum quality standards. On the OYO platform, guests
can do on-demand booking without waiting for a reply from a host, and they can check in and
out instantaneously instead of waiting at a reservation desk.
They’ve partnered with more than 200 hotels across 10 cities in India. By the end of the year,
they plan to quintuple in size with a network of 1,000 hotels in 25 cities. Along with Lightspeed

37. and Sequoia, Greenoaks Capital and DSG Consumer Partners also participated in the round.
Agarwal got his start programming when he was in third grade and he began living out of bed-
and-breakfasts regularly before starting OYO. In that year of traveling across India, he realized
how difficult it was to get any kind of consistency.
“The sockets wouldn’t be working. Or you couldn’t pay by card the next morning,” Agarwal
said. “With OYO, you know exactly what you’re going to get.”
Agarwal’s big round comes at a time when the Indian consumer Internet market is
finally flourishing after the country has served as a B2B or outsourcing platform for decades.
He decided to become a consumer Internet entrepreneur around the time that Flipkart and
Snapdeal were founded. Both are now two of India’s “unicorns,” or web companies valued at
well over $1 billion each.
“India was seeing its first iteration of high quality entrepreneurs,” he said. “It’s exciting times
for startups here.