OYO wanted to be the world’s largest hotel chain. It entered China market in 2017 and within 18 months went on to become the largest hotel chain in the country. But when numbers become the defining metric, quality may suffer.
OYO wanted to rise quickly, and as it seems, and its employees crossed the lines while the management either missed it or ignored it until things came to the hilt.
The latest message from the founder indicates that OYO will change gears for 2020. “Focus on profitable locations and buildings and avoid growth that dilutes our margins,” Agarwal wrote.
An initial public offering (IPO) is every startup founder’s dream. But if there is anything that the debacle at OYO has taught other startups — growth at all cost is not a great strategy. When it goes wrong, the damage to the brand and employee morale may end up delaying the IPO until the course correction takes effect.
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