Zostel's $240M hostel empire

Hey, it’s Guy & Farzan.

Sunday chaos in the kitchen. A beer can exploded in my hand. I launched it toward the sink as the fridge then decided revolution was in order. Both doors detached themselves with perfect comedic timing. One bounced like a rejected pitch deck, finding my wife's wrist. Kitchen mutiny. Appliance rebellion. All good things happen in threes, and in the middle of the night a mirror fell off the wall. Monday suddenly feels calm by comparison. Let's dive into this week's founder stories.

Reading time: 8.25 mins

In the mail today. 3 founder stories, 1 bit of founder advice, 1 quote

 Founder story 1 

How Zostel built a $240M hostel empire Without owning a single brick

From College Friends to Travel Pioneers: How Seven IIM (Indian Institutes of Management) Graduates revolutionized budget travel in India and built a $240M Empire with zero property ownership.

The Journey
- Met as friends with a shared passion for travel
- Experienced backpacker hostels during European exchange program
- Launched the first Zostel in Jodhpur in 2013 with just four rooms
- Started with personal savings and support from family and friends
- Expanded to 110+ properties across India and Nepal
- Reached $240M valuation without owning a single property

The Evolution of Vision
- 2013: "Let's test if Indian travellers would embrace backpacker hostels"
- 2014: Expanded to 12 hostels across India
- 2015: Entered key tourist destinations like Delhi, Jaipur, and Mumbai
- 2018: Grew to 40+ hostels throughout India
- 2024: Built a network of 110+ properties across India and Nepal

Overcoming Obstacles
- Faced the difficult choice between secure corporate careers and entrepreneurship
- Most Indians didn't even know what "backpacking" was at the start
- Operated with no external funding and no industry experience
- Founders served as their own housekeeping staff, receptionists, and marketers
- Had to create a market that didn't exist yet in India

Today's Impact
- $240M company valuation
- 2 million+ travelers hosted
- 110+ properties across India and Nepal
- #1 ranking on TripAdvisor for many locations
- Industry-leading occupancy rates of 80-90%

Growth Strategies That Worked
- Community-Driven Scaling: Created a model for travel enthusiasts to open Zostels in their hometowns
- Property Flexibility: Offered both greenfield (new builds) and brownfield (renovations) options
- Revenue Sharing: Zostel provides brand, marketing and tech while partners invest in properties
- Designed for Interaction: Created spaces that encouraged socialization among travellers
- Multiple Offerings: Developed Zostel Classic, Zostel Homes, and Zostel Plus to serve different markets

Key Milestones
- First property in Jodhpur ranked #1 on TripAdvisor within months
- Dharmveer turned down secure IIM placement to pursue Zostel full-time
- Expansion to 12 hostels by 2014, just one year after starting
- Attracted international backpackers before the domestic market caught on
- Created economic opportunity for local entrepreneurs through a partnership model

The Philosophy "Sometimes, your market doesn't know what it's missing until you show them."

"If you want to scale fast, find a way to turn your customers into your partners."

Founder story 2

ODDMuse: Aimee Smale’s story from £0 to £5M in 3 Years

Amy quit her 9-to-5 job at ASOS to launch ODDMuse, a women's fashion brand now valued at £24M. Starting with just £12,000 from her savings, she went from 5 sales on launch day to £5M+ annual revenue in just three years.

The Journey:
- Launched September 2020 during the pandemic
- Saved £12,000 while working at ASOS (£8K for production, £4K for shipping/samples)
- Made £15K on the first day after a blazer went viral
- Generated £100K in first three months
- Now fulfils 10,000+ orders monthly
- 35 employees across store, buying, marketing, and customer service

Key Success Factors:

1. Pre-order model: Allowed scaling without investment - selling stock before paying for it

2. Single product focus: "One product can change your business" - a blazer and later a dress each generated £1M+

3. Organic growth: Went viral when a fast fashion brand copied her design

4. Email marketing: Accounts for 60% of revenue using strategic automated systems

5. Physical retail: Opened a Covent Garden store generating £650K since November 2023

6. International strategy: Initially targeted US market (now 40% of sales), then expanded UK presence (60%)

Recent Achievements:
- Latest launch day: £500,000 in 24 hours
- Just under £6M revenue in 2023 with £1M+ profit
- Growing social following (630K on Instagram, 300K+ on TikTok)
- Expanded into wholesale partnerships with Harvey Nichols, David Jones (Australia), and Bloomingdale's (Middle East)

Biggest Challenges:
- Growing pains with customer service during viral moments
- Self-funding challenges (account reached zero multiple times)
- Lost £50K deposit on abandoned Dubai store plan

Amy's advice: "Just start. You can begin sketching for free and talk to manufacturers before you have all the funds."

Founder story 3

See how Adi turned his passion for property into a $500K bootstrapped business in just one year.

From Living in Motels to Building a Bootstrapped Buyer's Agency: How Adi Chanda Transformed His Personal Property Journey into a Thriving Business Helping Others Achieve Financial Freedom."

The Journey
- Migrated from India to Australia in 2000 at age 10
- Experienced initial hardship - lived in motels, temples, and friends' homes
- Graduated as dux of high school despite challenges
- Studied electrical engineering and science at Monash University
- Worked various jobs - McDonald's, tutoring, bouncer at Melbourne clubs
- Progressed to senior product manager at Telstra
- Left corporate world in 2023 due to toxic environment
- Started property investing at age 24
- Launched Alaya Property in April 2024

The Evolution of Vision
- 2000: Immigrant child navigating a new country
- 2024: From property investor to buyer's agent guiding others
- 2024: Founded Alaya Property to help investors build sustainable portfolios
- 2024: Focused on creating financial freedom for clients
- 2025: Reached $500,000 in revenue in the first year of business

Overcoming Obstacles
- Navigated challenges of immigrant integration
- Worked multiple jobs while studying
- Learned expensive property investment lessons over the years
- Lost 5 years of potential growth by not leveraging existing properties
- Overcame fear of marketing and self-promotion
- Initially struggled with over-responsibility and boundary-setting
- Built business from zero personal brand recognition

Today's Impact
- $500,000 annual revenue
- 6 employees
- Completely bootstrapped business
- Expanded from solo operation to team in under 12 months
- Helps clients create financial independence through property

Growth Strategies That Worked
- Consistent LinkedIn content (3-4 posts weekly)
- Focus on three content pillars: personal stories, thought leadership, client cases
- Building genuine relationships throughout the property industry
- First-principles approach to market analysis
- Adding economist expertise for macro-level insights
- Identifying emerging markets before they become mainstream
- Creating a personal brand through authentic storytelling

Key Milestones
- Started investing in property at age 24
- Left corporate career in 2023
- Launched Alaya Property in April 2024
- Expected 3 clients in first 4 months, got 3 in the first month
- Expanded to 6 team members within the first year
- Reached $500K revenue by March 2025

The Philosophy "Property has never been about bricks and mortar to me. It's about stability, security, and long-term choice creation."

"If you approach every interaction as a transaction, you're doing it wrong. Take the time to get to know the people you work with, not because you're trying to 'close deals,' but because relationships matter."

 Founder advice from Charles Burdett (founder of Pip Decks)

20 things no one told me about building a business that I learned the hard way.

Steal this list and imbue it in your brain - WARNING: effects may be permanent.

(Number 19 is the best hack for avoiding burnout. and number 13 is annoyingly true and underrated marketing advice.)

Let’s go:

1. Create and dominate a category of one. Competing is a tax you pay for not being original.

2. Innovation is recombination. Don’t chase originality. Combine familiar ideas in ways no one else has. That’s how new categories are created.

3. Positioning beats product. People need to understand why it matters before they care how it works.

4. Subtract until it’s clear. If your customer doesn’t get it in 5 seconds, they won’t buy it.

5. Focus is leverage. Most businesses die from trying to do too much too soon.

6. High-agency people are unstoppable. Hire for it. Build for it. Be it.

7. If it compounds, do it daily. Audience, trust, product quality. The best stuff takes time but pays forever.

8. Don’t optimise what should be eliminated. If it’s not working, kill it. Don’t fix it.

9. One high-leverage decision beats 100 low-impact tasks. Most to-do lists are just procrastination.

10. Products that feel better sell better. UX, copy, and design aren’t polish. They’re the product.

11. Pricing is branding. If you want to be taken seriously, charge like it.

12. People buy on emotion and justify with logic. Hit both or you’re invisible.

13. People don’t want more choice. They want confidence. Tell them what to do and why.

14. Distribution beats invention. A decent product with great reach beats a great product no one sees.

15. If the anecdotes disagree with the data, believe the anecdotes. Real behaviour beats reported behaviour every time.

16. If you torture the data, it’ll tell you anything. Know when to stop analysing and make a call.

17. Don’t assume people are rational. Most decisions are emotional, habitual, or driven by identity.

18. Build trust before you ask for anything. If they don’t trust you, nothing else matters.

19. Build something you still want to run in ten years (i.e. something that GIVES you energy and doesn’t suck it). If it only works as a short-term hack, it won’t last.

20. Your scarcest resource isn’t time. It’s relationships. Protect them. Invest in them. Everything good flows from that.

Which one hit hardest?

 A quote we loved

That’s me done for this week.

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See you in 7 days.

Guy + Farzan
Founderoo