
Unicorn Feces - kgwgk
https://www.profgalloway.com/unicorn-feces
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r_singh
Finally, somebody talks about the problems with OYO's business model. I
personally think it's a WeWork in the making for sure. If I had Softbank
shares, this article would be enough to make me sell.

Meanwhile, here in India, journalists just can't seem to write about anything
except the OYO's greatest achievement, i.e. raising a few billion dollars.

It should've been common sense by now, that raising huge sums, is actually a
liability. Sure, it's an achievement for a founder to convince investors to
give them a huge sum for their experiment, but most people are just looking at
it as an end in itself (as if the company has succeeded already).

P.S - Just to reiterate OYO's founder's tendency to overpay. A friend of mine
leased a hotel to OYO in Mumbai at a 30% higher price than what they would get
for it otherwise (~$30,000/mo). And they're still paying the mount, even
though rents are down another ~25% due to a slowdown.

Update: OYO's been getting negative news, mostly because of retaliation from
hotels in India. Not because of making silly acquisitions, etc.

~~~
sha_r_roh
Interesting, the most common narrative in most circles is how OYO is cheating
its hotel partners left, right and centre. Basically, the OYO model is quite
simple. Small hotels should upgrade their facilities and services to be in
line with OYO standards (this upgradation is financed by the hotel owners).

With this new OYO branding, it provides new customers to hotels. Better
services would mean more customers and a higher revenue, right? But this ends
up killing the hotel's regular supply lines and traditional channels.

The real issue for hotel owners though is that while upfront OYO promises
monthly payments higher than their current revenue, this seldom happens. Also
apparently OYO is always late in paying dues and adding unsubstantiated
penalties. Most news is littered with such examples.

[https://inc42.com/buzz/sikkim-hoteliers-protest-against-
oyo-...](https://inc42.com/buzz/sikkim-hoteliers-protest-against-oyo-as-
unpaid-dues-mount-employees-held-hostage/)

[https://economictimes.indiatimes.com/small-
biz/startups/news...](https://economictimes.indiatimes.com/small-
biz/startups/newsbuzz/as-softbanks-oyo-booms-some-indian-hotels-cry-foul-and-
check-out/articleshow/71477016.cms)

~~~
r_singh
You're right, that was/is a phase. The FHRAI (federation of hotels and
restaurant association of India) complained against some of OYO's business
practices in July this year and it made a lot of news (mostly changing
policies with regards to commission and also delaying commission) to the
Competition Commission of India.

Currently, OYO is making news for 4 reasons:

* Protests from hotels (so called OYOpreneurs)

* OYO founder's buyback funded by debt against shares and Sequoia, Lightspeed exit

* OYO growing a lot and acquiring companies worldwide

* Possibility of OYO being a WeWork in the making

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undefined3840
Opendoor also has pretty negative reviews from everything I can find online.
Would guess tech is hardly a component to this business - likely just some
basic pricing models. Seems like the basic playbook is to lowball desperate
homeowners, make a few thousand dollars worth of renovations (if at all), and
then turn it around and try to sell it for a lot more. Not exactly rocket
science, and definitely riskier in a downturn in their core markets like Las
Vegas and Phoenix with relatively high supply as is.

