Coming from a family of 37 Doctors, Dr. Ritesh Malik was destined to be a Doctor. Or so his family thought. From studying Medicine in Tamil Nadu near the forests which once housed the brigand Veerappan to his latest exit with Oyo, you Dr. Ritesh Malik’s story is a fascinating one. Even more fascinating is Project Guerilla. Listen to Ritesh of Innov8 on funding amazing ideas, coming from a family of 37 doctors and two exits.
Ritesh is a big believer in having a bias for action. Although he was able to get an exit for his first startup rather quickly, he did not become guarded about his money. He invested in Josh Talks when Angel Investing as we know it was still emerging. Josh Talks today has become a terrific platform. His other notable investments include Inc42.
Listen on YouTube
The journey that Ritesh has been on has been incredible. Be sure to check it out especially if you are a young entrepreneur.
Ritesh is a boundless source of energy and is always out there speaking to CEOs and business leaders.
Some notable quotes from the interview:
Times of India said “Would you like to partner with us? We said, obviously. Whenever you get a seat on a rocket ship, you don’t ask which which seat
Check out these 2 incredible episodes on India's Real Estate Industry:
Here’s what the word cloud looks like for this episode:
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people, building, innovate, india, startup, country, called, doctor, founders, realized, entrepreneurs, creating, working, business, capital, journey, entrepreneurship, investing, campuses, delhi
Krishna Jonnakadla, Dr. Ritesh Malik, Nida Sahar
Krishna Jonnakadla 00:01
This is Maharajas of Scale, the podcast where we go behind the scenes and talk to founders who are demolishing the myths around building and scaling a big business in India. These are the stories that have shattered the assumptions around Indian consumers and are changing the game completely. I am Krishna Jonnakadla, serial entrepreneur, co founder of Flit - the fashion locater in town and startup mentor, bringing you these stories. Hey, everyone, this is Krishna from maharajahs of scale. Today we have a young entrepreneur. We have interviewed a bunch of young entrepreneurs before, but this young entrepreneur Dr. Ritesh Malik is very different from the ones that we've spoken to before 30 under 30 with two successful exits for both ventures that he started out, and for those of you that are wondering whether the doctor is a medical doctor or a PhD doctor, he's a medical doctor. Ritesh, Welcome to maharajahs of scale. Terrific to have you here. Thank you very much Krishna. I'm super excited for this conversation. Wonderful. Let's get some initial aspects out right away. Let's discuss in a way in terms of numbers, the impact that you're having, the number of places you are, and Gosh, you've done all of this in what, like three years? Yes. Talk to us about that number journey and the scale journey.
Dr. Ritesh Malik 01:25
Great. So when it comes to innovate currently, as we speak, we are across eight cities, we are across 22 campuses, and almost 15,000 seats live and we want to go up to like 24 to 25 completed by your closing 2019.
Krishna Jonnakadla 01:44
Wow. And if we were to sort of compare this in terms of, let's say football fields or factories, how gigantic would that be?
Dr. Ritesh Malik 01:53
Honestly, I've never thought of it that way. But I think it must be he a million square feet.
Krishna Jonnakadla 01:59
Wow. Okay, that that that's amazing. Let's talk about your background a little bit. You're a medical doctor by training. Do you still practice?
Dr. Ritesh Malik 02:08
Krishna Jonnakadla 02:09
You've never practiced?
Dr. Ritesh Malik 02:11
I never I always tell my enemies if you should really get treated by me, I forgotten everything.
Krishna Jonnakadla 02:19
Well looks like not just in medicine even in terms of the places that you operate in, they possibly need your touch and learn a thing or two from you. Talk to us about that childhood journey. How did you end up being a doctor?
Dr. Ritesh Malik 02:33
So I was born in a small Punjabi family. We are from a small village called Khanna, born and brought up in Delhi. I did my schooling from DPS Mathura Road. And in my family it's it's it's a challenge to become anything in but Dr. Unique to become a doctor. We have 37 doctors in our family. And the day I was born, my mother still recounts that my father just held me I said that my son is going to become the DM cardiology in in pediatrics. And this was June 14 1989. And and I was shocked. In our country in Southeast Asian countries like India and China. We are a victim of a disease called Asian parents syndrome. Bed very of family decides what you would do in your life, irrespective of your brain print irrespective of your machinations. India is particularly like, and then whenever I talked to my American friends, they're always shocked at how can you have a business in something called a family business across five generations. I've been a victim of APS, my grandmother said I will not be cool if you do not become a doctor.
Krishna Jonnakadla 03:46
Dr. Ritesh Malik 03:48
And they were so adamant that in my 11th I wasn't allowed to take even maths. I took Bio without Mathamatics.
Krishna Jonnakadla 03:56
And you ended up being a doctor. Did you ever complete it?
Dr. Ritesh Malik 04:00
Yes, I have worked at Gangaram hospital in Delhi for nine months. I was a house surgeon there, and I used to hate it.
Krishna Jonnakadla 04:10
Very interesting. So from Punjab from what I gather you did your medicine in MGR Medical University?
Dr. Ritesh Malik 04:18
Yes, this wasn't village on the border of Tamil Nadu and Kerala southern Nilgiri forest where Veerappan had his last days. So this was a tribal area and learned a lot.
Krishna Jonnakadla 04:28
Did your Midas touch have anything to do with Veerappan stopping his activities as well. I am just kidding. So tell us about that. A Punjabi and Tamil Nadu is staunchly anti Hindi. Not to mention that they do have students come over from across the country. How was that? How was that journey?
Dr. Ritesh Malik 04:45
It was a very interesting journey one brought up in Delhi when you are very entitled towards things like electricity, water supply and all. But when I went to Theni, this is a small village called Canavala and this is also a hot spot for AIDS. And I realized 90% people don't even wear chapplas over there. Forget 3G. 2G networks were erratic over their. Electricity out of 24 hours, only six hours electricity used to come. And I realized that India is not Delhi, Bombay, Bangalore. India is those seven lakh villages. India is one of the largest rural democracies in the world. And that led me to realize the potential of our country, our country in back in 2007 when I started my medicine, a country where people still don't have access to capital. Just imagine the kind of opportunity is that is, and I always wanted to be an entrepreneur. The good part of studying at Theni was that I had ample amount of time because of no distraction of TV, internet. No Hindi media. My one day was like, four days in Delhi or Bangalore. And then that really helped me to read a lot of books. It was like a personal jail for me. I could actually learn more about the world. I read a lot of books on leadership on personal biographies, autobiographies of leaders and realized that entrepreneurship is my calling. And slow and steady from my first year started banking in college. I don't think I've gone to college for more than 30% of the time and and spent a lot of time in the village learned the language started a band in Tamil, I was the only North Indian we used to sing Tamil songs. And that was actually to impress a Tamil girl who I proposed and she said no to me, but because of that I learned guitar and Tamil.
Krishna Jonnakadla 06:38
Wow. Wow. Very interesting.
Dr. Ritesh Malik 06:40
Yes. So so Theni for me was,I think the only thing that has changed my life is Theni. I used to take a train from Delhi. They didn't even have a railway station. So I used to take a train from Delhi. It used to take two and a half days to reach Madurai and then you should date but then also to reach my hospital.
Krishna Jonnakadla 07:00
Wow, the dream of entrepreneurship born in a remote village in Tamil Nadu. That's a very interesting source of inspiration. I'm actually glad that most people go to these sorts of places and most of the inspiration tends to be political in nature. Okay, we have to have a moment we have to do something of that side. There is a story about Toms Shoes, which which, which is somewhat similar. He's walking around around I think, in somewhere in South America, and he sees people walking barefoot, and that's when you buy a pair and then a pair gets donated. That's that's a pretty well known story. And just like it inspired him to be an entrepreneur. So prior to Tony, there was no entrepreneurial bug in you.
Dr. Ritesh Malik 07:43
I don't know. Well, I really wanted to pursue economics. I thought I'd become a teacher. And as a child in India, you are confused. You make so many people your parents say something else, your teacher say something else. Your friends say something else. You want to become something else. And I just went back to my school and I was taking a lecture for ninth or 10th grade students, with their parents and they asked that you said a lot of your your speech was about discovering your passion. And they asked how do you discover your passion? I was actually puzzled because, you know, we as Indians, we don't know what passions are. And I came with an analogy that if you want to discover your passion, when you take a new book, your first page in India mostly is about your religious thoughts. You make them all I used to ride over sort of the second page in beautiful handwriting I used to write the first page of my notebook when teacher used to dictate something while going towards the last page your handwriting becomes like a doctor as if you are writing a prescription. But your passion does not lie there your passion lies on the last week. When teacher on the board is saying things which do not interest you. At that point in time what you're making on the last page. Some people are making the spaceship someone making in a building These are your passions. These are innate desires. And I always urge the youth of our country to follow your passion. Even if you don't make enough money following your passion, at least you'll you'll die a happy life.
Krishna Jonnakadla 09:11
That's last page inspiration. If you go back and look at your scribbles on the last page, potentially it holds some clues to what possibly drives your happiness. That's an amazing piece of insight. In fact, that possibly is the first time I've ever heard anybody practically articulate, where to find their passion. I was commanded. And that's some deep thinking. The family of 37 doctors, I come from a family of professional people. I've always held this notion that when you have too few choices, you feel constrained. But when you have too many choices, you feel confused. So my father said, you can be whatever you want. And I started wondering, okay, what should I be? And I'm and I made a choice. So when you made this choice to be an entrepreneur, you were still studying medicine, correct?
Dr. Ritesh Malik 09:56
Krishna Jonnakadla 09:56
Very interesting. And how did this sit with Family With possibly, you know maybe multiple generations of people being physicians and medicals.
Dr. Ritesh Malik 10:07
Not well not at all well, so this is very interesting that whenever you start thinking about something which is a deviation from a conventional thought process at first it's met with ridicule that "Are you mad?". Specially in hierarchial family like yours, where we are a joint family. And they feel that this is a ridicule the moment they ridicule This is the boy but stop thinking about this. When they see that doesn't happen, then it gets serious and then they start with a continuous battering of the fact that they try to urge you to not do anything. First very politely and then they very stern steps and then once you do not listen to your elders yourself, what they do is they go to people who you trust like your say your chachaji or teachers that Please tell him that this is wrong and when Even then the boy does not or agree or listens, then they completely go into the mode of you're not going to have food until and unless you do this, but but I, I don't blame them. Because if you if you go into the emotional psychology of parents in India we are we have something called kangaroo parenting. till the age of 30. Our children do not go out of homes. The median age of leaving homes in the United States is 18 and a half. So I think it's just that they're so concerned our our Indian parents, and I think this I can be realized when I have my children because the kind of emotion which of Indian parent has for his or her child is amazingly efficient, and cocoon. So So because of that, at times, they really want us to focus on careers which are safe, where there is 100% guaranteed chance, and the Indians do not like taking the risk, especially when it comes to their children.
Krishna Jonnakadla 11:59
Its a funny thing, isn't it?. They have parents, they have a relatively safe society. And if you if we were to compare the economic system of the United States and the Indian economic system, the Indian economic system is far more forgiving than the United States. You have tons of people who just sit around doing nothing, and not that I blame them or I have anything against them in the midst of this. And given that the cost of living is low. It's sort of this perfect set of conditions to say, Okay, you've got everything, you've got a launch pad. Now go do whatever you want. On the contrary, we actually don't do what we want. We continue to seek out safety. And the United States is just a stark opposite of this. Many times kids leave for a variety of reasons. As peer pressure, the culture is that way 14, they leave home and they find maybe day jobs, flipping burgers and doing all sorts of stuff. And if they don't get their act together, the economic engine is very very unforgiving. Right? So if they don't have a job, they don't have health care. So for instance, while it was not like that for a long time, it just goes to prove that having maybe a certain degree of insecurity could be a source of huge innovation.
Dr. Ritesh Malik 13:15
Krishna Jonnakadla 13:16
So let's talk about how you channel that entrepreneurial bug into your first startup. When did the first startup happen?
Dr. Ritesh Malik 13:23
Yeah, this was 2012 I just finished my final year in MBBS. And and came back to Delhi started working at Gangaram hospital and met Abhishek my co founder and and it was his brainchild. I had nothing to do with the idea I did not know tech. Even today I do not know tech. And and he is he's a geek from from IIT and and really, really smart guy and and met him through my dad's very close friend. And he said I'm building this and I said this is a great product. augmented reality at that point in time was very very nascent. And he had Technology by which you could recognize an image of a TKB in two to three seconds on a 2G network and this was called CHOG compresses two gram of brilliant and converted that augmented reality project is this was sort of a college project and then we converted that into a building augmented reality proposed promotional campaign for for for all sorts of media. For example, we did one campaign in the Delhi elections for Dr. Harsh Vardhan, where across 1300 billboards The moment you take the app of Adrian augmented reality app and and the moment you open that and pointed towards the billboard, Dr. Harsh Vardhan and Modi Ji start talking to you on your phone. So these were very lucky and that point in time newspaper sales were going really down and and Times was looking for some sort of a solution. They said would you like to partner with like, obviously, whenever you get a seat on a rocket ship, you don't ask which which seat At that point in time we didn't know what valuations were we didn't know what how to build a product. We just knew one thing that we had built the most amazing product built ever. And and then we did a beauty with them built, operate and transfer. We launched the alive app on December 16 2012. On day one, we were anticipating seven 800 downloads. We were stuck at a two and a half lakh download bigger and this was not not not because of us but because of reach of fans of India. Right the thing which worked for us was an India is very different from the west we were told that just launched on the Android and the iOS networks do not go on anything else. And we said no we will be on all the five networks will be on a Symbian for Nokia we will be on the BlackBerry will be on Android will be on an iOS will make sure we are we are there across and to our surprise our maximum download skin from Symbian at that point.
Krishna Jonnakadla 15:57
Oh my goodness, my goodness two Half lakh downloads on day one on day one. Wow that's that's a tremendous number. And what happened after that? How long was that journey with the Elijah.
Dr. Ritesh Malik 16:11
That was a very quick I think that was not even an ear and and post launch of life. And I was taken completely in under controlled by time defender. And I took an exit from at
Krishna Jonnakadla 16:25
Very interesting, this summer detour. So I'll call them summer tours, the ones that you did in LSC and Harvard, where they do nurture this entrepreneurship ambition per say.
Dr. Ritesh Malik 16:38
This was basically so LSE I did to reinstate the thought process, whether I really like entrepreneurship or not. And I took a course in management, technology and innovation. This was a two and a half month course. This was 2010 summers, and I went to London, and I realized that I was a boy who used to never attend classes in meds, who used to hate medicine. And I used to sit on the first bench writing notes. And I realized that I love this. And this actually reinstated my confidence in in pursuing entrepreneurship. And when it came to Harvard, that was for the lack of confidence. So while while building at stuff, I realized that I didn't know anything about entrepreneurship. I learned a lot from Abhishek, she's really smart. So he taught me a lot of things. He's obviously elder to me. So he taught me a lot of things. But I realized that going to Harvard didn't teach me anything much. But the idea was that I met some of the best people and and Harvard is all about that dream of people coming together. And there I found a lot of people whom now I work very closely with you.
Krishna Jonnakadla 17:46
Very interesting. Were there any seminal relationships from the LSC and the Harvard days, which sort of...
Dr. Ritesh Malik 17:57
First invested was was a very dear friend of mine My best friend actually Sumit So, I wanted for 50 lakh rupees to make sure that I do not end up up in a in a in a bad debt situation. So, so he was the one who gave me that 50 lakh rupees. Very interesting. So, before you did innovate the time between a lives exit and in a way, you were an active investor at that point in time and you still are in some sense, right? Well how long was that that was for about three years the so 2013 made, I think we got completely so 2013 when I finished my MBA from I completed my agency from the hospital and post that whatever small amount of capital that we got started thinking that we're doing less that and again, it's a joint family Asian bedroom syndrome and grandfather told a cold grandmother told my mother sense and Boca mutual funds. My father said invest in real estate, and I said no, that is a third asset class that is going to be insane rewarding plus impactful for the nation nation. And that is investing into startups, big penny stocks. And obviously I had a big un crime my family and and then started working with a lot of entrepreneurs started visiting a lot of epicenters of entrepreneurship in our country like Startup Village in Kochin, Bangalore, Hyderabad. And I realized that in our country, angel investments weren't happening at all. And even if they were happening, they will localize to certain mafias like the Flipkart mafia, right? localize to localize to mafia is like the legal mafia mafia. And we realized that entrepreneurship is a dream, everyone should be able to have access to that. And the only reason Silicon Valley is Silicon Valley today, it's not because of the venture capital. But because founders has turned into investors, the only sustainable Silicon Valley's is to convert founders into into Because a founder as an investor is the biggest asset a founder can have. And to be we came up with this thesis, I wish I didn't have a lot of money, we came up with this thesis will invest five to 10 lakh rupees in multiple startups just for the sake of being a part of them. And this will be my own capital, I'd not want to take it or build it as a funds. Because the moment I take capital from someone else, he will come after me after after 16 months under five years, and tell them give me my money back. Then I will go to the founder and give me my money back. That creates unnecessary pressure. So for me project moment, we're in collab movement so that you found us coming together, investing into founders helping them grow with a time band of if an exit comes before villain good, if it doesn't leave the founder irrespective as long as the Counter is ethical for 120 months of legal the founders be there for him even at 3am in the morning. And that was the mission of project Gorilla. And this journey started in the summer of 2013. And till summer of 2015. For two years, I had got almost 20 checks. And a small person like me, who was just cutting 5to 10 lakh rupee checks for entrepreneurs came in the list of top five angel investors of the country. And I was shocked that if I, I'm devoting in significant capital to the ecosystem, if I can come in top five angel investors of the country, what are other people in the ecosystem doing right to he came with this thesis, but then we realized one thing in my five lakh rupees or five lakh rupees of a of an entrepreneur, but at least 20 times more valuable of seed capital from a builder, right. So, the thesis is founders coming together, investing into their own capital and helping them irrespective of the outcome. That is that is the gang project Gorilla.
Krishna Jonnakadla 22:02
The scene hasn't changed much it has has it the the the mafia still exists, the notions still exist, the myths still exist. It's a personal opinion of mine that just like we possibly ignored the pager that ignore the radio era and jump straight into the telecom era. But the United States went through all of those over a span of three decades. Yeah. And if you see an aviation as well, we jumped straight into the low cost airline sort of a monitor. Yes, there are reference several journeys overseas. It doesn't just because the United States or any other economic engine went through two decades of evolution doesn't mean we should, but I still feel when it comes to capital availability. I was one of the few who celebrated the while i'm not in favor of unnecessary, outsized valuations. I still thought the fear Exit was very good for the country. You need some amount of irrational exuberance for people sometimes to take bets. And out of that irrationality sometimes when magic happens, right, yeah, and I have put profitability of my startup as well. And I can see that if it comes to early, it can stifle the innovative thought processes, because only when you have no limit thinking and true blue, blue sky thinking can a lot of magic happen. Yeah, that's that angel investing has definitely gotten deeper, it has gotten broader. There are definitely far more people in the country and VC investing has also changed, but when it comes to reality, do you agree that there is a much longer distance to go a lot of myths still exist out there in terms of only a select set of people getting captured? So much so that while we are all for Entrepreneurs will have the Midas touch. Many times there may be interesting, you know, use cases and stories hiding somewhere else. Right?
Dr. Ritesh Malik 24:08
So my sense over there is that in our country, we are blinded by educational institutions. We are blinded by past experiences, we are blinded by especially wishes of our country. You'll be amazed. I have, I think not those of a lot of VCs, I could not raise VC capital. I raised in my entire journey at innovate, raise just 10 and a half billion rupees in equity. And we built up a heavily bicton level center level profitable business. And I realized one thing that one of the largest reasons was my background. People are still very of founders who do not have expertise. And honestly even today, I do not know how to run an Excel sheet properly. I realized one thing that for entrepreneurshipyYou do not need to know these things Jack Ma did'nt Vijay Shekhar did'nt Shaker. Your educational background. Entrepreneurship needs to be democratized. So for example, in Project gorilla five years back, I had baged a 17 year old child, his name was Shobit. He said I will build a platform much stronger than Tel in India. And I tell you, man, I told him the How will you do that? He said, I will be creating democracy in education by creating content for vernacular audiences and motivating them to follow their passion. And he created a platform for Josh Talks. Today, Josh Talks is India's largest inspirational leadership platform. And I was the first investor. Four years five years back, no one even wanted to give them 10 lakh rupees. Today, like they'll be announcing soon, but they are raising insane capital. I had backed three founders who came to me four years back with an idea of creating a startup like us. startup platform called I was the first angel investor.
Krishna Jonnakadla 26:05
Dr. Ritesh Malik 26:06
Today in 42 is one of the largest platforms in our country. Right 3.9 million viewers per month. There are insane amount of stories. And I realized that when, as a founder, there's nothing more gratifying than being a part of these stories from the beginning.
Krishna Jonnakadla 26:23
Most definitely, most definitely, I can sense the excitement when you talk about them. Anyone covering or involved in the startup space has definitely ever been 42 job talks. these are these are amazing stories. So that brings us to an interesting point. And this is one of the foundational beliefs, beliefs of managers of scale, which is that the market exists in India. But for some reason, via not ahead of it back in my IT services days when we used to bring American companies or clients to India to visit For size site visits and stuff like that, they would always ask us a question YZ Indian infrastructure like this, and we would quit saying, the way the West works is you put infrastructure first and then people later and in India, it's just the opposite. We put people first and then put all the infrastructure around them and start building once they arrive. And we still see that behavior. I always hear the notion and I continue to hold the notion that there is so much opportunity in India, all most things, most products, most services are executed really, really poorly, with hardly any competition. And sector after sector. There are amazing examples of that. So a very invested venture with the right kind of quality and predictable outcomes will never run out of a market to service or will never run out of money. Unless somebody is really foolish financial financial perspective or unethical. And I hear some people say, well, the whole Indian market is just about hundred million people. And hundred million is a big number. And people keep fishing in the same pot. So why did why do you think there is still thinking that's pervasive, saying, Hey, there isn't enough of a market here. While again, we see story after story that keeps destroying that thesis or that notion.
Dr. Ritesh Malik 28:25
I am honestly, the good part is that I do not have an MBA and not an engineering degree. So my perspective is very, it's very practical, because I've gone through the entire journey of investing in startups being a part of their board, starting my own selling my company, I've seen the entire cycle, and I feel there's no market better in the entire world than India. It's a democratic goldmine. Just imagine Is there any country in the world where you have the this kind of an opportunity Just last last month I met with top God, the CEO of WhatsApp. Okay. And he said that we have 42 corrode people, right, our largest population in India using WhatsApp on a daily basis from multiple outwards right now. Now he said that there is no country, China will never allow them. Ours is a democratic goldmine, where where there's a level playing field for national as well as international entrepreneurs. And because of that, who wins is our consumer.
Krishna Jonnakadla 29:30
So while your experience out of practicality bears out a different sort of a philosophy. Why do people continue to believe that there isn't a market large enough? There aren't enough stories while there is story after story, but why does that myth still persuade?
Dr. Ritesh Malik 29:48
I think it's for people who are who have not turned successful right now. I think they really need to and the easiest way to avoid failure is to blame somebody In this case, it's the nation's opportunity. I feel that if I'm not successful in India, I cannot be successful in any country in the world. If you go to the US the kind of customer demands that are there You can't even imagine customers are embracing over there if you if you if you if you do not do well with your product, you are really the kind of litigations that happened in India. Customers have very limited demands if you just suffice them. The record is so huge you can't even imagine like I'm I feel we are very lucky to be in this era, where we have almost 48 grown people online and we are going to take this population to 67 corrodes very soon. Just imagine 67 grown people online, and these are people who are mobile first.
Krishna Jonnakadla 30:46
Dr. Ritesh Malik 30:46
This is a this is a landmine of opportunities. We do not have enough content for these people. Right. You do not have so many and the beautiful part of our country's it's broken. Every every every every 35 kilometers. We are taking Our dialect, just imagine the opportunity. Everywhere that you see there's an opportunity to improve efficiency. Take our sanitation, you take our plumbing system, you take our crime, you take our water, you take our climate, you take anything. mobility, transportation, you just need to have the brilliant of execution, your idea, and just start. The biggest thing, the biggest reason, which is building our entrepreneurial ecosystem is fear of failure.
Krishna Jonnakadla 31:30
Dr. Ritesh Malik 31:31
They're so scared. And this is because of our education system. Our education system teaches us how to be risk averse at an IIM Ahamdabad took a lecture and white discussing about an idea of a person just came up with this Excel sheet, building a model. I said do not build models, dude, just start, start and models will become on their own. This is the second step in the center stone for every success is starting something three and a half years back. I started in more weight. That is my goal. If I didn't start, I would have nothing to sell.
Krishna Jonnakadla 32:04
Bias for action. On that count, let's jump into the innovate story. What What was the genesis of innovate? You were happy investing. What exactly was the spark?
Dr. Ritesh Malik 32:17
So the spark was that after investing the 20 companies, and our first Office of ad stock was in a village of Noida called sector 663. Right. It was a pain managing my office just out of 24 hours, seven to eight hours, electricity was not there. No, it was host six o'clock. Our women employees could not go out the kind of our ACS malfunction, water supply was erratic by five was a pain to manage. Dealing with our landlord was a menace. And we are taking the lead for nine years. And he realized one thing as an entrepreneur, I'm investing online. 35 to 42% off my off my seed capital into offices and maintenance of such a shitty system. And we report that is this us we're feeling this feeling this or is this every once you started talking to these 20 companies like Josh Talks And this is a single, we are so frustrated with the opposite experience. And then we thought and I thought this is a massive opportunity if we are feeling this, and this was like we didn't even know about the work we didn't know about co working. We just knew about rigorous. I went to a rigorous and I saw expensive freelancers make this faces, and we came up with this idea that let's create a beautiful office space and Indians are Garfield's, our employees and that means we hate Mondays. You go to a cyber hub, you go to an HR layout, you go to any corporate hub in either Delhi you go to monitor tech Park. On Mondays, people come with these local faces. They're frustrated did not want to work. And I realized that in our country which, where we want to grow at seven, seven and a half percent a year, how can we grow if we do not? If our employees don't work you will you see China, these people are working bloody 14 to 15 hours a day. And our employees are waiting for for lunch breaks. They are waiting for the clock to take five o'clock in the evening. And they drift from Mondays through Thursdays, and Fridays are the best space days for them in the offices. The reason is our offices are mundane, uninspiring and broken and empty but there's a massive opportunity. Let's make offices clubs. Let's go to the most amazing location A city has which should be very close to people's houses so that they could transport Emily, very close to public transport. Visiting the most amazing design fashion possible. I'll send you a couple of pictures of innovate. We do not copy anyone. We can need our own spaces which are insanely web and we take Indian design forms. And the third one is a layer of more called community. Let people come together from a freelancer to an employer from fortune 500 company, let them interact with each other. When we design our spaces, we design it according to the Brownian movement concept. So that maximum idea pollination can happen. Let them be a part of we have soccer clubs, we have created clubs, we want people to enjoy working together. And the fourth one is still all of this truth technology and and brilliantly proven financial model.
Krishna Jonnakadla 35:44
Let's talk about the community aspect a little bit. Because in a normal company, you have hundred 200 people. There is something that's binding you maybe it's the name of the company, its people going to signal cafeteria, things like that. I love how you're describing the community aspect as a more in a co working concept. literally almost everyone has his own his or her own company. There is no more overlap. There is no conversational overlap. And there is no office politics to discuss either, right? There's no one getting promoted. There's no one getting demoted. Nobody knows what their paycheck is, was. They don't know in normal organizations either. They're all to each one to each one their own right? in that kind of scenario. Creating a community can make a huge difference creating a sort of a network but it is easier said than done. When you do sort of realized that building a building a community is going to be a very fundamental aspect of your business model.
Dr. Ritesh Malik 36:49
So when we started Cannaught Place central This was our first hundred percent of the moment we launched it. We thought we were just building an office space for people to come together. But we realized When people came together and started working irrespective of their background irrespective of their companies, human beings in the history of mankind, Homo sapiens, our to form cohorts for CPE this is this is this is not today, this is one lakh years history of Homo sapiens, how we are able to be born to be feed safe introverts in society. And we built a society called innovate, where what we do is, we get a lot of people from different backgrounds. And the good part is we don't need to face office politics, candles, and we talked about things which find people together, and we divide our community into seven parts. From a freelancer focus community there a freelancer joins our network and any business to a startup entrepreneur to an NGO to an msnbc A large fortune 500 company we have today as we speak, we have over 500 companies working with us. We have thousands of entrepreneurs working with us. And we do events from a coding hackathon for women alone, to get your daughters to work. Communities something when people come together, you and me do not need to have a common background to discuss something we are humans, we can discuss any and everything, we will definitely find one thing in common. And that is the sense of bonding with another human being that is so powerful that you can't even imagine every human has some of the other thing to be cheap. And that's our motto at innovate. We encourage co workers. Make sure that and this is how the model has evolved. Earlier what we used to do was we were a space and entrepreneurs that model doesn't pursue working is a myth. Though it's called a co working space, we are a managed workspace 70% of the times we give you your own advice given which has only your access. But there is 100 feet of BBC client for us to visit a small MSRP or a crew member startup, we give them their own space and 50% of the times they come out talk to other people use the cafe use the washroom use the recreation spaces and then go back into their food because people do not want if you are working for mirages are still working for innovate, hate working together. Because our punches don't match. But if you are working in cable a I am working in cable TV and we just meet for lunch a day. magic happens.
Krishna Jonnakadla 39:50
Right. I love how you're saying this. co working is a myth. It's possibly a community. So on that count What are some unique things that only innovate does for innovators doing that is redefining that.
Dr. Ritesh Malik 40:06
So, our four fundamental first principles are location design community and technology. So, location DU taken innovate we will never be in a in a sad location nation, we understand that we are a real estate business first than a tech business. We make sure if you are in Bangalore, we will be in Coromandel if you are in Coromandel We will be right opposite Starbucks, near for mall, if you are in Delhi, we will be in cyber hub, if you are in Delhi, we are in Caugght Place not placed in Noida. The idea is we want to be across in cities across the retail hub so that people do not feel that need they need to travel long distances from their home. We believe in saving time of community. Second is making sure each and every campus I would urge you to visit our working campuses. Each and every campus is a work of building our campuses leveraging Indian heritage, working with street artists working with design firms, which are enlightening and then copying from the best. And you'll be amazed. Just imagine people spend more than eight hours a day, every day working at their offices and offices on Monday. Right? weekly they have they have you blades they have the water is not coming you enter into and this is uncomfortable and you have the guts to enter.
Krishna Jonnakadla 41:37
That's correct. We have a washroom problem.
Dr. Ritesh Malik 41:40
We believe that every inch of your office should be inspired to conduct your meeting. You should be inspired to get your clients your members to visit you in your office. And if you're able to do that magic happens it and in a hotel, a person sleeps for eight hours a day. This is alpha waves. I'm talking about better an innovator comes to innovate, morning can evening, six o'clock, we're talking about eight hours of his most productive time. And if I'm able to make that that productive time productive if and make sure that he does not have an interrupted by five, he does not have easy problems and his, his his his his self actualization is elevated a strong sense of community and bonding, just imagine the kind of work that we're doing for the nation.
Krishna Jonnakadla 42:25
So absolutely. productivity is not a bias that exists everywhere. These are not notions. It's born out of a decade plus working experience in the US. So I constantly get into this whole comparison of what exists there versus what exists here. In my opinion, I think creative and inspiring workspaces is definitely one of the critical components. There's possibly a larger story of why they have such gloomy faces on Monday mornings. At least the officers can do a job of picking up their Monday mornings, but Beyond just cheering up somebody, all of this must definitely be creating some amazing work culture. Right? Do you see? Have you seen that happening? Because work culture working culture is is not a concept that's very widely discussed. And more importantly, when you do not have a consciously articulated work culture, you usually tend to go to the, you know, the basis and the, you know, most weirdest, the average, the bad of the averages, right. So creating these interesting workspaces. Have you seen, operating cultures change, newer sort of thought processes evolved as a result of what you're doing?
Dr. Ritesh Malik 43:44
It's a transforming effect. What happens is when an employee of a particular company meets an employee of another company, there's a lot of engagement. There's a lot of transfer of energies and cultures. You'll be amazed The kind of flow from our lines to a company which is completely Lala company, when it when they work out of an innovate, that mindset changes because they are surrounded by startups, freelancers, these fortune 500 companies and they realize that the kind of because see the issue is when you are in your own office, you don't interact with these a human is nothing but what is exposed to right. And I think when people are exposed to these kind of environments, they imbibe a lot from the environment. So any examples or stories or jump out that stuck your mind in terms of the impact that the innovate spaces and culture have had on your tenants on your one on one impact with I still remember which is the closest to my heart is ever two founders. This was three years back I forgotten their names, both of them were having a cigerette on the terrace of Caunnaught Place and this was a 2016 February and go them had planned to shut their shops by having a cigarette the one said that they are I'm doing this and the other said I'm doing this Why can't we merge together and and and build something larger and within seven months of that labor acquired for a million dollars.
Krishna Jonnakadla 45:19
Dr. Ritesh Malik 45:20
And that is the story which is closest to my heart.
Krishna Jonnakadla 45:22
Was it always a multi location scale concept in your mind when you started innovate or was that something that happened along the way?
Dr. Ritesh Malik 45:32
No, no, it was never that it was always that I just wanted to build one center. And the good part is my life has been I'm a lucky guy. I do not I've never thought of building scale. I didn't even know what scale was for me. Money doesn't motivate me so I never thought that I need to create large valuations I need to raise a lot of VC capital and all so for me what happened that when we started cannot base we were sold out and once a product is claimed, you have two options. Either you become a mom and pop shop, and just keep on doing what you're doing, or that always two choices. And at that point in time, startup India was happening. This was I think, 2016, February, March ish. And I met Adam Newman, he came to India to meet our Prime Minister. And he visited the campus and he was awestruck. He said, This is beautiful, come and meet me. And I was saying happy the world's largest co working prayer meeting a small time entrepreneur like me. So I took the flight, went to New York, took my sister along, went for four days and met Adam and our meeting was scheduled for half an hour, went on for almost four and a half hours. and learned one thing after seeing the books growth, that this is a large business opportunity, and I need to step up, I need to make sure that I'm able to create this impact on crops and skill this. And the moment I came back, we signed up another campus. And then obviously capital was a big challenge because all our businesses very capital intensive. And then applied to Y Combinator went to San Francisco. And that was another turning point in our vision boards, and why do you visited five campuses, 500 seats. And my father was very excited that you'll be having five campuses, you've never had anyone in our family doing multi location businesses. So even I was all pumped up. I was. And my friends are in five years ago. And I had the same with Michael, who co by ycombinator. He was my partner that I need to think of a million seats in five years. And I said, How can I do and he said, Do you know who that guy is? Speaking? I said, Yeah, he's the founder of a BD said, he's just like you. He is just like you. I've seen the journey, close your eyes and visualize a million seats in five years. And honestly, I was really scared because these things he makes large dreams make us uncomfortable, insecure. And how that Okay, let's let's do this not a million seed but but but let's think of the next three years and build at least 50,000 seeds and came back and started sending larger nieces and one another person who has transformed my life. After after Sumit check he was the first one who wrote the check off for me for no reason. And he was also our first enterprise client in Bangalore. And that was the time he shifted from startups and entrepreneurs because this little business, it's all crests and drops. It's not stable, Predictable Revenue will be shifted to as Music enterprises. And that changed the entire game for us. We started doing larger campuses. And the beautiful part is with this race and then afterwards in equity, rest all in landlord or Catholic schools are funded. We had raised almost 85-100 crores in, in building Catholics structures, which help us save a lot of equity.
Krishna Jonnakadla 49:21
So talk about the evolution of the users what sort of tenants and users do you have when you started out? You touched upon it briefly in terms of preventing the cyclical sort of curve from happening. Have the your coworker, your your community participants, your tenants or your occupants changed from what they were when you began?
Dr. Ritesh Malik 49:44
With salt transformed, co working honestly when we started, we didn't even know it. It was called co working. Our first name was innovate managed offices and then slow and steady first week used to call it innovation innovation Innovation Center. Then innovate managed opposite offices, then in a way to overcome as a concept has drastically back in 2015. When we started our first one, September 25, sorry, October 25, maybe we did our first inauguration. We didn't even know at that point in time I was I was meeting my life and leg, my, my my will be base at that point in time. And her father asked me that better calculator, what do you do? I said, I'm a doctor. What is your speciality? I said, I don't practice. And then what do you do? How do you earn? I said, I build offices. Are you a contractor? No, no, I built the offices for startups. I said, then he said that, are you not what are you doing with your life. And at that point in time, no one knew about co working when I told my parents that I'm going to do co working. They said I lost it. You can't be doing you can't be building offices. You need to lose something in which is at this moment. Electricity if not healthcare, so a coating has evolved. Our first set of hundred customers were only startups today 80 plus percent of our pace is SMEs and and enterprises. Our scale has has has changed significantly from freelancers and us and startups to more predictable revenue generating enterprises. That being said, we are very cautious about the fact that entrepreneurs, the kind of the reason that we started innovate. So today, if an entrepreneur comes to us, we are assets for entrepreneurs starts at 2999 per month which is cheapest in the country.
Krishna Jonnakadla 51:45
How has the market surprised you?
Dr. Ritesh Malik 51:49
It has grown 10 times more than I had ever anticipated. I do. I'm a lucky guy. I never thought government would take off October 2015. When I used to go to enterprises, they said why would we look at a co working space, and we are a fortune 500 company, but we never worked with another plan. Collaboration was non existent today working with mainstream. You take the example of Amazon, you take the example of BBC you take the example of vice, you take the example of Conde Nast magazine, RBL Bank, all of them are working out of a co working.
Krishna Jonnakadla 52:26
Right. So on that note, I have a bit theory. And in fact, maybe if I get some research done a little bit of as well, that the more controversial something sounds like the more successful it can be. Right?
Dr. Ritesh Malik 52:44
This is a beautiful this is called the pet theory.
Krishna Jonnakadla 52:46
It's just one of my several pet theories. But for something to create interest, it has to be somewhat controversial. Controversial, it creates discussion. It creates curious It creates intrigue. Just when your mom said with a camera, that's that just means that it has touched a nerve in her mind somewhere. That means, how in the world is this going to work?
Dr. Ritesh Malik 53:15
I completely agree with that I'm a doctor. And I think the reason we've tasted slight successes is the fact that I'm a doctor. Media covers it very quickly, because they're very few.
Krishna Jonnakadla 53:27
Right. Before we had the startup, where, while it is still a small wave in India, I deeply respect Naryanmurti and what he has done to the Indian IT services ecosystem. Yeah, in some sense, it would not be far fetched to call him perhaps a great grandfather of the Indian startup ecosystem, because all of tech got unleashed with VCs but me whatever they did, yeah, I don't think it is his fault. Too often. We hold up people saying, okay, in order to build a tech company, you need to be a techie. In order to be a healthcare company. You need to be a doctor. Yeah. And domain expertise is valued for all the wrong reasons. Emotions I because many times the best doctors don't build the best healthcare systems, right? They they an amazing consultants, but they will not have a clue how to put a business together. Yeah, I think that's some myth which possibly you've conquered in spite of and that possibly white validates that you've succeeded because you're a doctor. So that's great. I will switch gears and ask something else. Yes. Two exits. One alive, project gorilla. Bunch of excellent, amazing startups created. And now the audio exit with innovate. Someone would say in fact I possibly will also say you're the you are an entrepreneur with the Midas touch. How do you feel?
Dr. Ritesh Malik 54:54
So I feel new, never start anything for selling the Reason for starting something is that you believe in the problem you face that problem yourself. I honestly I never traveled in a way to sell I never started add stuff to to take an exit so quickly. But I believe that great companies are always built on great products just focus on building the best product possible. You will take it to logical conclusion. Now we never word they're out in both the cases to sell anything. We were there for raising more capital. But then opportunities emerge. And for us especially on the on the front of innovate. We were seeing that the competition was heating up and it will also call at the right time you need to take your call. And we realized that co working under the best of my other co working calendar and we had just we were nobodies 10 and a half old is like it's like peanuts for for for for the CO working ecosystem. And the lies that more than the capital alone, we need a lot of capability. There's no company on the face of earth that has shown capabilities in real estate tech than oil. And honestly, we got a lot of offers from other places as well. But we decided to go with oil because a there's a massive culture match, and that scale ambition, and that is actually now fueling the growth of innovation. I think, under oil, our growth has almost been 10 times then than it was before. Not only because of capital, but because of scale.
Krishna Jonnakadla 56:34
Right. A more personal question. What defines Ritesh Malik? What defines you?
Dr. Ritesh Malik 56:41
I think, moral character. I am a big believer and whenever I do anything, it needs to be not because of money. Money is a byproduct. And the people I believe people who run after money, never end up making a lot of money. I think moral character takes a long time to relationships. Today, when I build my my relationship with someone, I do not build it because there's an ulterior motive. I always believe trust is equal to credibility into reliability into intimacy divided by self interest, the more your self interest, the lower your trust, and each and every one of us, or selling something called we need to meet, we need to be very trustworthy in our dealings, and that is the and if you are running the long, long term gain, focus on trust building. And I think that I have a really sound sleep because I have so many people praying for me, and I think that has worked really well for me.
Krishna Jonnakadla 57:38
Very interesting. Any final final thoughts? This has been a very interesting conversation. We've had a free flowing conversation touching upon a variety of aspects. If there was ever a list of philosophical entrepreneurs 30 under 30, I think you would fall in the top 10. We've discussed a lot of philosophy we've discussed a lot of business, maybe more than Philosophy and light on business. There's, there's the outcomes and your sort of simple way of articulating your alive and innovate journey hides a lot of truths and facts behind it. We've had an interesting discussion. Before we before we wrap up any final comments or thoughts from you?
Dr. Ritesh Malik 58:21
I think I've just done petite. I will long life in front of me. I think success is is a very temporary phenomenon. You need to pay rent on a daily basis on a daily basis. You need to hustle. I disagree with the notion that you've got an exit. Now, become complacent. If you've got an exit if you if you've got a victory, get shaken up. Because this will make you complacent. This will make you not work hard, hard, harder, that then you use your earlier right now is the time where I should be very insecure. I should even work harder. deemed disposition and I need to increase my rent on a daily basis we need to the day I do not pay my rent the world is changing so fast just imagine a company like forever 21 just filed for Chapter 11. The world is changing. I never thought Jet Airways would not be in the skies one day, no one is immune. You're not even the largest and the largest corporations in the world, the world, everyone and disruption is for real. We need to be a giant on a daily basis massively proven. And the sad part of our country is we say that we are a startup nation. Tell me one startup in our country that is throwing cash flows. On the bottom line. Everyone is sucking cash. We need to build a profitable large IP ready businesses. And that can only happen and you need to be paranoid, not insecure. paranoid about disruption. someone out there in a flattened corner manga is going to eat your cheese and we don't even know and he will do it. With your consent of your customers, your customers do not care who are rubbish. Money is what they care is can replace money. He saved my money. If he has, they will give me their money if no, they will not. I always tell this to my mother, she's a gynecologist. I tell her that the day my wife gets pregnant, and if I do not have trust in your gynecological skills as a doctor and not getting her to you, I go, I'll say, Sorry, Mommy, I touch your feet. And I'll go to the gynecologist next door, and I'll get her delivered by that that is the level of, of customer trust, reliability and credibility.
Krishna Jonnakadla 1:00:38
I agree. I think perhaps for the first time in our recent evolution, we're in a we're at a point in time where But America Connor you know that kind of question doesn't really win you any business. And it's it's the customer is finally coming into his or her own starting to demand and I think they're great times ahead. The paying the rent on a daily basis being paranoid. One of the books earliest books I read was it grows only the Paranoid survive, and sort of a personal trait of mine as well to obsess over it. So much so that there was a global business head role, which I was interviewing for. It was supposed to be more of a formality with the chairman. This is way back in 2012 in the US, and I had presented a vision, and the chairman asked me a question. Everything sounds great. What is it that bothers you? I said, The day I get a feeling that I've arrived, or I have amounted to something, or I've succeeded, you know, that bothers me. I never wanted that to happen. I always want to be at the bleeding edge at the cutting edge, where I have this level of paranoia, that you know what the best is yet to happen. And whatever you've done is just yesterday, and that's what you need to focus on. And that's how you get successful. That's very important. Yeah, well, I wouldn't call myself successful. I think I'm still on the journey. And like, just to borrow your own analogy, I'm paying the rent every day. I lost the job, but never regretted even for a moment because if we do not have philosophical alignment in these foundational values, no point in working together anyway. Right. So Ritesh, it's been a terrific conversation. amazing journey. I will remember this for a long time. It's a free flowing conversation, but I think we had from your journey and Theni, Tamil Nadu to a family of 37 physicians to project Gorilla to Alive. Wow, that's, that's a very eclectic and an interesting background. And you just turned 30 and so much wisdom and philosophy. We wish you the very best, we are sure will see Ritesh Malik on even larger stages across the globe and doing much more things on a larger scale.
Dr. Ritesh Malik 1:02:55
Thank you very much Krishna. It was an honor to be a part of, of Maharajas of Scale.
Krishna Jonnakadla 1:03:01
Thank you Ritesh.
Nida Sahar 1:03:03
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