Instacart’s Origins:
Apoorva Mehta, a former supply chain engineer at Amazon, felt unfulfilled and sought a more entrepreneurial life. He moved to San Francisco and started multiple companies, mostly unsuccessful, before realizing a common problem: the lack of online grocery ordering.

The Birth of Instacart:
In 2012, Mehta identified the trillion-dollar grocery category as an untapped opportunity for e-commerce. He started coding the first version of Instacart and within three weeks, the platform was live. Initially, Mehta placed orders and delivered groceries himself, even giving himself a tip.

Skepticism and Conventional Wisdom:
The reception to Instacart’s idea was initially negative, with investors and advisors citing the infamous failure of Webvan, an asset-heavy grocery delivery company. Mehta argues that the landscape had changed since Webvan’s demise, with the rise of smartphones and GPS-enabled devices.

Reasoning from First Principles:
Mehta emphasized the importance of reasoning from first principles and not relying solely on conventional wisdom. He highlighted the shift from asset-heavy to asset-light models, enabled by the proliferation of personal devices.

Sequoia’s Involvement:
Instacart received funding from Sequoia Capital, a venture capital firm that had previously invested in Webvan. Mike Moritz, a Sequoia partner, had been on the board of Webvan during its downfall. Mehta’s emphasis on reasoning from first principles and his belief in the changing landscape convinced Moritz and Sequoia to support Instacart.

Startup Advice and Failures of Omission:
Mehta acknowledged that a lot of startup advice is generic and not always applicable. He emphasized the importance of assessing advice based on the specific context and challenges of the company. He highlighted the concept of “failures of omission,” where investors miss out on opportunities due to overreliance on past failures and conventional wisdom.

The Importance of Team Building:
Mehta stressed the significance of building a strong team as the foundation of a successful company. He realized that solving problems by himself was not scalable and that hiring the right team was essential. Mehta identified intellectual honesty, relentless execution, and the ability to scale as a leader as key characteristics for early-stage teams.

Differences in Early and Late-Stage Teams:
Mehta acknowledged that the nature of people attracted to early and late-stage companies differs. In early-stage companies, risk-taking and resilience are crucial, while in late-stage companies, brand recognition and stability may attract different types of individuals. Mehta emphasized the importance of understanding these differences and adapting the hiring strategy accordingly.

Company Evolution:
Instacart transformed from a marketplace to a four-sided platform, including customers, retailers, pickers/deliverers, and advertisers.

Bootstrapping and Supply Building:
Faced with the challenge of acquiring large retailers, Instacart employed “ninja shopping.” They purchased groceries from stores, photographed them, and uploaded them to the platform, creating a comprehensive data pipeline.

Barriers to Entry:
Instacart recognized the importance of building barriers to entry early on. Their technical expertise, vast product selection, and strong relationships with retailers became key barriers.

Technical Complexity:
Instacart’s efficient delivery of millions of unique items in each city posed a technical challenge that few could replicate.

Retailer Relationships:
Instacart’s significant contribution to retailers’ store volume led to the development of exclusive partnerships. Providing enterprise features and powering retailers’ dot-coms deepened the integration and strengthened the relationships.

Deliberate Approach:
Instacart’s success was not a result of chance but a deliberate and tracked effort. The company’s team actively worked on building barriers to entry and strengthening relationships.

Early Thoughtful Planning at Instacart:
Instacart’s early thoughtful planning and foresight laid the groundwork for the company’s success. Many companies lack forward thinking, leading to missed opportunities and vulnerabilities.

Existential Threat from Amazon’s Acquisition of Whole Foods:
Apoorva Mehta received a shocking call from the Whole Foods CEO, revealing Amazon’s $18 billion acquisition of Whole Foods. Whole Foods was Instacart’s largest partner, accounting for a significant portion of their sales. The news sent shockwaves through Instacart, with investors and customers questioning the company’s viability.

War Mode and High Beta Plan:
Mehta called an all-hands meeting, declaring “war mode” to combat the existential threat. Instacart devised a high-risk plan to sign every major grocery retailer onto their platform. The plan also aimed to rapidly increase Instacart Express memberships to retain customers.

The Alliance of the Willing:
Mehta and his team contacted every retail CEO in America to forge partnerships. The goal was to expand Instacart’s reach nationwide, making it available in even the smallest cities.

Conclusion:
Instacart’s rapid response and strategic partnerships helped mitigate the threat posed by Amazon’s acquisition of Whole Foods. The company’s resilience and adaptability allowed it to overcome this major challenge.

Scaling Instacart Enterprise:
Instacart Enterprise was scaled to provide functionality that made retailers comfortable putting their brand on Instacart. The company prioritized in-person meetings to build relationships with potential partners. Whole Foods leaving the Instacart platform led to growth opportunities and the onboarding of major grocery retailers.

Investor Shifts Over Time:
In early stages, investors are focused on growth potential and the opportunity presented by the company. As the company matures, investors’ focus shifts towards long-term plans, financial performance, and public market valuation. Different types of investors provide diverse perspectives at various stages of a company’s journey.

Value of Later Stage Investors:
Later stage investors can provide strategic guidance on slowing down growth, increasing profitability, and expanding into new categories or markets. They also offer valuable data and insights from similar companies, domestically and internationally, to aid in decision-making.

Starting a New Company:
Apoorva Mehta’s motivation for starting a new company was to create a legacy beyond just one successful venture. The thinking about early team composition changed dramatically between the first and second company.

Early Team Composition:
In the early stages of a company, Mehta prefers to hire people who are not very senior. This allows for more flexibility, adaptability, and a willingness to learn and grow with the company.

Being Strategic about Hiring:
As a second-time founder, Apoorva Mehta realized the importance of hiring experienced individuals who can scale down to become valuable individual contributors (ICs). This approach allows for both detailed work and sound judgment, eliminating the need for additional managers in the event of scaling.

Acknowledging Experienced People’s Value:
Elad Gil emphasizes the advantage of second-time founders accessing experienced individuals and recognizing their value beyond just talking about ideas. First-time founders often underestimate the contributions of experienced individuals and may overlook their potential.

Addressing New Challenges as a Second-Time Founder:
Second-time founders face unique challenges, such as ensuring the new venture meets their desired hurdle and carefully considering whether the problem they’re addressing has the potential to scale. Unlike first-time founders who might be more optimistic about their venture’s success, second-time founders have more experience and are more cautious in their approach.

Emotional Drain of Pursuing Unviable Ideas:
Apoorva Mehta shares his experience of emotionally draining himself by pursuing 20 ideas and building 20 companies. He developed a process to address this: writing down the top 10 reasons why an idea won’t work and then actively trying to prove those reasons as quickly as possible.

Importance of Identifying Non-Viable Ideas:
Both as an investor and an entrepreneur, Apoorva Mehta acknowledges the difficulty in identifying when an idea will not succeed. Emotional investment in an idea can make it challenging to accept that it may not work, leading to emotional drain.

Knowing When to Kill an Idea:
Apoorva Mehta’s 20-reason test helps entrepreneurs thoroughly evaluate an idea before investing time and resources. Take a month or two to identify all the reasons why an idea might not work. Only consider pursuing an idea if it passes this test and still has emotional appeal.

Avoiding Zombie Companies:
Most founders spend too much time on mediocre ideas that are likely to become zombie companies. It’s sad to see founders waste years on ideas that have no potential. Look for ideas that have the potential to solve challenging problems and have the right timing.

Focusing on a Handful of Good Ideas:
At any given time, there are only a handful of genuinely good ideas with the potential for success. Allocate resources to these ideas and avoid spreading yourself too thin. Don’t be afraid to work on ideas that others are also pursuing; execution is key.

Learning from Mistakes:
Every entrepreneur makes mistakes, but it’s important to view them as learning opportunities. Reflect on decisions that could have been different and consider the potential impact. Celebrate the things that were done right and learn from the things that went wrong.

The Changing Role of a CEO:
As a company grows, the CEO’s role evolves from hands-on involvement to resource allocation and figurehead. The CEO needs to pick their battles and focus on the most important issues. The CEO becomes the chief cheerleader and ambassador for the company.

The Next Act:
Many founders are now pursuing second acts, driven by a desire to make a difference in the world. This trend is exciting because it brings experienced entrepreneurs with proven track records to new industries. Founders should carefully consider their values and goals when planning their second act.

Focus on a Small Team:
A small team focused on a single problem is more effective than a large team juggling multiple tasks. Early-stage companies have an advantage due to their ability to concentrate on one issue.

Leveraging Crises:
View crises as opportunities for growth and improvement. Ask yourself where you want to be in two years and how the crisis can be used to the team’s advantage.

Clarity of Competition:
Competition creates a clear enemy and a sense of urgency. This clarity helps the company focus its creativity and resources on solving complex problems.

Inflection Points:
Be prepared for inflection points and challenges throughout a company’s journey.

Validating Instacart’s Model:
Signing the deal with Whole Foods was a crucial inflection point for Instacart, despite the unfavorable terms. The team’s commitment to proving the concept led to a three-fold improvement in the subsequent deal, legitimizing Instacart’s business model to other grocers.

COVID-19 as a Lifeline:
The pandemic transformed Instacart from a convenience to a lifeline, highlighting its essential role in delivering groceries to people’s homes. The company’s ability to adapt and handle the surge in demand during this time was commendable.

Reflecting on Regrets:
Apoorva Mehta acknowledges that there might be regrets in hindsight, but he is proud of the team’s resilience and ability to navigate challenges.

Assessing Bad Ideas and Identifying Opportunities:
Mehta emphasizes the importance of identifying catalysts, such as regulatory changes or structural shifts, that can disrupt industries. Evaluating a business as an investor involves considering its potential as a good business, enjoyment factor, and mission alignment. Mehta believes that founders should prioritize the business aspect first, as it influences the enjoyment and mission aspects.

Exploring New Industries:
Mehta evaluates potential industries like climate, space, and robotics to identify opportunities that align with his criteria of good business, enjoyment, and mission.