Arial B 1 . 6 ' 7 What Would You Do? Oyo Hotel Headquarters, Gurugram, India. CEO Ritesh Agarwal started Oyo in 2013. Like most Indians, he was much more likely to stay with friends or family when traveling. In fact, there are just two hotel rooms for every 10,000 people in India (compared to 40 in China and 200 in the United States). Why? Because, according to analyst Chetan Kapoor, "There are lots of hotels where customers go in thinking, 'Will there be rats in my room?" Roughly 60 percent of those rooms are in independent budget hotels, which vary dramatically in quality. Agarwal got the idea for Oyo Rooms in his teens after spending a year staying at over 100 different hotels. After studying the industry from the ground up, he concluded that cleaning and pest management was not enough. The key, instead, was to fix, repair and upgrade facilities and amenities to meet the rising expectations of India's growing middle class. His business plan incentivized hotel owners to agree to inspections and follow Oyo's 200 rigorous qualitycontrol requirements, including linen quality, mattress comfort, cleanliness, shower water temperature, and staff appearance. Inspections also encouraged hoteliers to make repairs and upgrade facilities. The advantage, says Agarwal, s, "When you book a room through Oyo, you know exactly what you're going to get." Customers are attracted by Oyo's quality-control guarantees. Hoteliers with improved facilities, amenities, and services get higher occupancy rates. Oyo earns 20 to 25 percent of the room charge to pay for its services, including inspections, marketing, and web and app development. Agarwal got two early breaks. In 2013, he received a $100,000 fellowship plus two years of mentoring and workshops for his Oyo startup plans from the Thiel Foundation, funded by entrepreneur and investor Peter Thiel. In 2015, two major investment groups, Sequoia Capital in Silicon Valley and SoftBank Group in Japan, invested $100 million. By the end of 2015, Oyo was listing 30,000 rooms in 120 cities in India. Those early successes brought an additional $1 billion in investment from Sequoia and SoftBank in 2018. But that came with significantly higher expectations, tough questions regarding Oyo's plans, and much closer scrutiny of operating practices. The core concern was whether the 26-yearsold CEO and his team could manage Oyo's next round of growth. With those higher expectations in mind, what should Oyo's long-term goals be? Should Oyo just expand in India, or should it have global aspirations? If global, where, and how fast? And, what business is Oyo in? Is it a travel aggregatorl like Expedia, Hotwire, or Hotels.com that makes money by serving as a front-end app/web destination for hotels to find customers and vice versa? Or is it more like a franchiser that helps franchise stores (in this case, hotels) maintain consistent standards via training, inspections, and financial assistance for a percentage of the room charge? Or, looking to the future, should Oyo be in the business of running its own hotels? Answers to these questions will dictate how Oyo does business, where, and with whom. For example, a new investor is encouraging Oyo to buy a 657-room hotel in Las Vegas. Should that be in Oyo's long-term plans? Oyo is projected to continue running losses for two or three more years because of the expenses (marketing, additional employees, etc.) associated with adding new hotels, But, at some point, as startup funding runs out, investors expect companies to pay for themselves. If Oyo is to be profitable, what does it need to do become a more efficiently run company? Where can Oyo likely tighten spending without hurting customer satisfaction? Marketing? Hotel refurbishment and upgrades? Information technology (app, website, etc.)? Number of employees? Finally, with the company growing at breakneck speed, what's the best way to maintain control over the quality of hotels affiliated with Oyo? So far, Oyo has relied on "captains," local employees whom it hires to inspect hotels and quickly fix on-site problems for customers. But there are already signs that this control process (monitoring progress toward goals and taking corrective action when needed) is breaking down. Complaints from frustrated customers and frustrated hotel owners have risen significantly. What can Oyo do, beyond relying on "captains," to control and maintain high standards and customer satisfaction as it continues to grow