1 00:00:15,316 --> 00:00:22,356 Speaker 1: Pushkin. If you live in a city, you've probably seen 2 00:00:22,436 --> 00:00:25,156 Speaker 1: ads for one of these new instant delivery companies. You 3 00:00:25,196 --> 00:00:27,556 Speaker 1: download the app, go on your phone and order the 4 00:00:27,596 --> 00:00:29,476 Speaker 1: kind of stuff you might buy at a drug store 5 00:00:29,516 --> 00:00:32,156 Speaker 1: or seven to eleven, and then in like twenty minutes 6 00:00:32,196 --> 00:00:34,876 Speaker 1: or a half hour, your stuff gets delivered to your door. 7 00:00:35,636 --> 00:00:37,476 Speaker 1: I have one of those apps open on my phone 8 00:00:37,516 --> 00:00:39,876 Speaker 1: in front of me right now. It's called gopuff. The 9 00:00:39,916 --> 00:00:43,196 Speaker 1: apps called gopuff. It's one of the oldest and biggest 10 00:00:43,236 --> 00:00:46,956 Speaker 1: of the instant delivery companies. And also right now I'm 11 00:00:46,956 --> 00:00:49,436 Speaker 1: talking on my computer to the co founder and co 12 00:00:49,596 --> 00:00:53,836 Speaker 1: CEO of gopuff. Can you hear me loud? Claire? Great, 13 00:00:55,316 --> 00:00:57,756 Speaker 1: thanks for doing this. I've been reading about you and 14 00:00:57,956 --> 00:01:00,476 Speaker 1: playing with your app. Can you just say your name 15 00:01:00,556 --> 00:01:02,716 Speaker 1: so I have it and so I don't say it wrong. Yeah, 16 00:01:02,756 --> 00:01:07,196 Speaker 1: of course, Raphael illashayev. As it happens, I live in 17 00:01:07,556 --> 00:01:10,796 Speaker 1: Brooklyn and New York, and go Puff delivers to me, 18 00:01:10,916 --> 00:01:13,276 Speaker 1: and so I thought a fun thing to do, if 19 00:01:13,316 --> 00:01:17,396 Speaker 1: it's okay with you, would be that I order something 20 00:01:17,996 --> 00:01:21,076 Speaker 1: now and you sort of talk me through what's happening 21 00:01:21,116 --> 00:01:23,316 Speaker 1: as a way of understanding both your company, how it 22 00:01:23,356 --> 00:01:25,876 Speaker 1: works now, and also some of the things you're trying 23 00:01:25,876 --> 00:01:27,756 Speaker 1: to do. You know, It's sort of the thing of 24 00:01:27,756 --> 00:01:29,676 Speaker 1: the show is the problems people are trying to solve, 25 00:01:29,876 --> 00:01:33,356 Speaker 1: like I love it. I love it, problem too and 26 00:01:33,396 --> 00:01:37,796 Speaker 1: I love it. I'm Jacob Goldstein and this is What's 27 00:01:37,796 --> 00:01:41,036 Speaker 1: Your Problem, the show where entrepreneurs and engineers talk about 28 00:01:41,036 --> 00:01:43,356 Speaker 1: how they're going to change the world once they solve 29 00:01:43,396 --> 00:01:47,356 Speaker 1: a few problems. Raphael and as co founder started go 30 00:01:47,516 --> 00:01:51,116 Speaker 1: Puff back in twenty thirteen. They were college students delivering 31 00:01:51,196 --> 00:01:54,396 Speaker 1: munchies to their friends. Today you can go on the 32 00:01:54,396 --> 00:01:56,676 Speaker 1: gopuff app and order most of the things you'd find 33 00:01:56,716 --> 00:02:00,916 Speaker 1: at the drug store, snacks, diapers, advil, and the company 34 00:02:00,996 --> 00:02:02,916 Speaker 1: is trying to figure out how to add more stuff 35 00:02:03,036 --> 00:02:06,836 Speaker 1: like produce and hot food. Gopuff operates in hundreds of 36 00:02:06,836 --> 00:02:09,036 Speaker 1: cities and they've expanded from the US to the UK 37 00:02:09,356 --> 00:02:12,676 Speaker 1: and France. And the number of problems the company has 38 00:02:12,716 --> 00:02:18,316 Speaker 1: to solve boggles the mind. Competition, technology, logistics, hiring, politics, 39 00:02:18,676 --> 00:02:21,916 Speaker 1: it is all here and today on the show, we're 40 00:02:21,916 --> 00:02:24,156 Speaker 1: going to do it in real time as I place 41 00:02:24,196 --> 00:02:26,556 Speaker 1: in order to figure out how the business works and 42 00:02:26,596 --> 00:02:29,316 Speaker 1: the problems they're trying to solve this is fun. By 43 00:02:29,316 --> 00:02:31,316 Speaker 1: the way, I've never I've never done this a live order. 44 00:02:32,556 --> 00:02:35,756 Speaker 1: I'm enjoying too. I'm enjoying too. So okay, so I 45 00:02:35,796 --> 00:02:39,676 Speaker 1: got the app There it is, and it says on 46 00:02:39,756 --> 00:02:44,036 Speaker 1: here fifteen to forty minutes. So let me see. So 47 00:02:44,076 --> 00:02:46,396 Speaker 1: the first thing is like, what do I order? So look, 48 00:02:46,396 --> 00:02:48,756 Speaker 1: I'm going to order. What I'm going to order oreos. 49 00:02:49,076 --> 00:02:52,156 Speaker 1: To me, the spirit of gopuff is oreos. I assume 50 00:02:52,156 --> 00:02:54,756 Speaker 1: you have you do have oreos, So it's seven to fifty. 51 00:02:54,876 --> 00:02:56,956 Speaker 1: So seven fifty for a bag of oreos is like 52 00:02:57,676 --> 00:02:59,436 Speaker 1: higher than the grocery store, right, I would say it's 53 00:02:59,436 --> 00:03:02,276 Speaker 1: pretty pretty in line to like middle tier retail, closer 54 00:03:02,276 --> 00:03:04,516 Speaker 1: to what you would experience in a drug store. And 55 00:03:04,556 --> 00:03:07,516 Speaker 1: then looks like my minimum order is twelve ninety five. 56 00:03:07,556 --> 00:03:09,836 Speaker 1: So let's see. I mean, I feel guilty about the 57 00:03:09,876 --> 00:03:12,556 Speaker 1: oreos we always need, say bananas, yeah, out of stock. 58 00:03:12,596 --> 00:03:14,596 Speaker 1: It looks like you have bananas, but they're out of stock. 59 00:03:14,676 --> 00:03:16,956 Speaker 1: You have let me see, should try they're too popular? 60 00:03:18,356 --> 00:03:20,316 Speaker 1: Let me just see? Am I just well? You have 61 00:03:20,356 --> 00:03:22,636 Speaker 1: fugie apples? Okay, eighty nine cents for fogie apples, So 62 00:03:22,756 --> 00:03:25,476 Speaker 1: let me just get some fujie apples here, maybe about 63 00:03:25,516 --> 00:03:31,916 Speaker 1: of water. You're a gatory appreciate cardon milk, maybe smokely 64 00:03:32,436 --> 00:03:38,836 Speaker 1: um Sky's hustling, always always be selling, always being um Okay, 65 00:03:38,876 --> 00:03:41,236 Speaker 1: so let's see. It looks like there's a two ninety 66 00:03:41,276 --> 00:03:45,156 Speaker 1: five delivery fee and then there's a tip which it's 67 00:03:45,156 --> 00:03:47,556 Speaker 1: auto populating at three ninety nine. So that's fine. I'm 68 00:03:47,556 --> 00:03:49,316 Speaker 1: gonna go ahead and place the order just so we can, 69 00:03:49,796 --> 00:03:52,676 Speaker 1: you know, pass go here, place order. Let's do okay, 70 00:03:52,716 --> 00:03:54,596 Speaker 1: my order is being placed in here just for fun. 71 00:03:55,516 --> 00:03:58,876 Speaker 1: Started the Stopwatch on the cassio twelve. Let's do it 72 00:03:59,076 --> 00:04:01,876 Speaker 1: two twelve. I love it. So I just well, first 73 00:04:01,916 --> 00:04:04,436 Speaker 1: of all, what's happening now? I just pushed a button 74 00:04:04,796 --> 00:04:07,956 Speaker 1: and something somewhere in the world just happened in what 75 00:04:08,236 --> 00:04:10,636 Speaker 1: warehouse that you want right? Tell me what's happening right now? 76 00:04:10,916 --> 00:04:13,796 Speaker 1: So there's a micro fulfillment center somewhere in your neighborhood. 77 00:04:14,636 --> 00:04:18,436 Speaker 1: I don't know where you live. So in a neighborhood 78 00:04:18,436 --> 00:04:21,836 Speaker 1: in Brooklyn, they received an order and they got routed 79 00:04:21,876 --> 00:04:24,716 Speaker 1: to a packer. Okay, so like did a bell ring? 80 00:04:24,836 --> 00:04:28,316 Speaker 1: Did somebody like get a buzz on their Yeah, like, 81 00:04:28,396 --> 00:04:30,996 Speaker 1: what really happened? There's an actually a buzz. Yes, there's 82 00:04:31,076 --> 00:04:33,916 Speaker 1: vibrates vibrates on their handheld device. So I'll take you 83 00:04:34,036 --> 00:04:36,196 Speaker 1: a kind of step backwards. When we were building out 84 00:04:36,236 --> 00:04:38,876 Speaker 1: this thing, and we're building out all the technology within 85 00:04:38,916 --> 00:04:41,356 Speaker 1: the four walls of the building, and then later on, 86 00:04:41,556 --> 00:04:44,076 Speaker 1: you know, the last mile, we realized that there was 87 00:04:44,156 --> 00:04:46,916 Speaker 1: nothing out there that can solve this for us. We 88 00:04:46,956 --> 00:04:49,956 Speaker 1: didn't want to build all this software to power all 89 00:04:49,996 --> 00:04:53,116 Speaker 1: these buildings. But the reality is, because nothing like this existed, 90 00:04:53,356 --> 00:04:56,316 Speaker 1: we had to build a whole bunch of proprietary software 91 00:04:56,636 --> 00:04:59,516 Speaker 1: to then pick and pack and then ultimately been in 92 00:04:59,596 --> 00:05:02,036 Speaker 1: batch so put it into a batch of orders and 93 00:05:02,076 --> 00:05:05,396 Speaker 1: then eventually send it out to the end customer. And 94 00:05:05,396 --> 00:05:07,956 Speaker 1: you have to do that constantly under thirty minutes, right, 95 00:05:07,996 --> 00:05:10,156 Speaker 1: So I just, oh, yeah, under thirty minutes. And also 96 00:05:10,156 --> 00:05:12,196 Speaker 1: I want to pause here just to make a distinction 97 00:05:12,236 --> 00:05:15,476 Speaker 1: clear that might not be obvious to people listening, and 98 00:05:15,556 --> 00:05:19,316 Speaker 1: that is this is not instacart. This is not You're 99 00:05:19,316 --> 00:05:22,196 Speaker 1: not a company that has people picking things up from 100 00:05:22,236 --> 00:05:28,116 Speaker 1: existing stores. Right. This is your MicroWarehouse and you own 101 00:05:28,316 --> 00:05:31,756 Speaker 1: the oreos and the apples. I just bought right, you're 102 00:05:31,756 --> 00:05:34,316 Speaker 1: paying for the warehouse, you're paying for the apples. This 103 00:05:34,396 --> 00:05:37,036 Speaker 1: is the opposite of like an asset light business, right, 104 00:05:37,036 --> 00:05:41,236 Speaker 1: you're buying all this stuff and reselling it. Just classic retail. Yeah. Yeah. 105 00:05:41,316 --> 00:05:44,876 Speaker 1: The problem with a third party delivery model it's notoriously 106 00:05:44,916 --> 00:05:48,316 Speaker 1: unprofitable and it's not consumer centric, right, So when you 107 00:05:48,396 --> 00:05:51,556 Speaker 1: don't own the inventory, you can't really tell the customer, 108 00:05:51,596 --> 00:05:53,036 Speaker 1: like the same way that you just saw the bananas 109 00:05:53,036 --> 00:05:55,196 Speaker 1: were out of stock. If you're ordering from a third 110 00:05:55,196 --> 00:05:57,716 Speaker 1: party app you know, twenty five percent at a time, 111 00:05:57,836 --> 00:05:59,676 Speaker 1: you're ordering an item and then you get in a 112 00:05:59,756 --> 00:06:02,156 Speaker 1: replacement item instead of the item that you've order, or 113 00:06:02,236 --> 00:06:04,596 Speaker 1: to ask you for something else because there's no real inventory, 114 00:06:04,676 --> 00:06:06,796 Speaker 1: so they don't know. I'm placing the order for a 115 00:06:06,836 --> 00:06:09,796 Speaker 1: thing that's not there, and it can a company that 116 00:06:09,836 --> 00:06:12,476 Speaker 1: doesn't know that it's not there. That's right, You know 117 00:06:12,636 --> 00:06:15,556 Speaker 1: that because it's your banana. That's not that's it is 118 00:06:15,756 --> 00:06:19,116 Speaker 1: it is our banana or as our milk. Wait, I'm 119 00:06:19,116 --> 00:06:20,716 Speaker 1: gonna pause and say my order is on the way. 120 00:06:20,716 --> 00:06:22,916 Speaker 1: We're running behind on the interview, it's going too fast. 121 00:06:23,516 --> 00:06:26,556 Speaker 1: But tell me, what does this fulfillment center look like, yeah, 122 00:06:26,596 --> 00:06:30,636 Speaker 1: it looks like somewhere in between of a retail location 123 00:06:30,876 --> 00:06:33,276 Speaker 1: and you would expect an Amazon warehouse to look like. 124 00:06:33,436 --> 00:06:36,596 Speaker 1: Think about you know, seven to twelve thousand square feet, 125 00:06:37,156 --> 00:06:39,316 Speaker 1: so larger than what you would expect the drug store 126 00:06:39,356 --> 00:06:41,596 Speaker 1: to look like, smaller than what you expect a grocery 127 00:06:41,636 --> 00:06:43,356 Speaker 1: store to look like. But we can pick a lot 128 00:06:43,396 --> 00:06:45,996 Speaker 1: more inventory inside of the building because there's no walk 129 00:06:45,996 --> 00:06:49,276 Speaker 1: in traffic that's going through the aisles. The building is 130 00:06:49,316 --> 00:06:53,036 Speaker 1: optimized for you know, rapid picking, because the key is 131 00:06:53,076 --> 00:06:54,796 Speaker 1: that you want to pick it as fast as possible, 132 00:06:55,116 --> 00:06:57,036 Speaker 1: throw it in the bin. Then you have an algorithm 133 00:06:57,076 --> 00:06:59,236 Speaker 1: that then determines like, hey, do we send out this 134 00:06:59,356 --> 00:07:01,596 Speaker 1: door order right away or do we wait another dirty 135 00:07:01,636 --> 00:07:04,196 Speaker 1: seconds to forty five seconds to an order work that 136 00:07:04,236 --> 00:07:05,876 Speaker 1: could come in that's from the same block or the 137 00:07:05,916 --> 00:07:07,556 Speaker 1: same name. A right, so we could have been and 138 00:07:07,596 --> 00:07:09,876 Speaker 1: batch it better. Okay, so the driver is on the 139 00:07:09,876 --> 00:07:13,636 Speaker 1: way or the delivery guy is on the way, let's 140 00:07:13,636 --> 00:07:16,636 Speaker 1: talk a little bit about that. I mean, first of all, 141 00:07:17,036 --> 00:07:20,276 Speaker 1: is he an employee of yours or not? So all 142 00:07:20,316 --> 00:07:22,556 Speaker 1: the folks that are working inside of the four walls 143 00:07:22,556 --> 00:07:25,796 Speaker 1: in the buildings are employees anyone that's delivering an order, 144 00:07:25,796 --> 00:07:28,756 Speaker 1: A driver partner there ten ninety nine d a contractor. Okay, 145 00:07:28,796 --> 00:07:31,476 Speaker 1: So I mean, what are they making? Fifteen bucks an hour? 146 00:07:31,596 --> 00:07:34,036 Speaker 1: Twenty bucks an hour? So the national average is eighteen 147 00:07:34,076 --> 00:07:36,036 Speaker 1: to twenty four bucks an hour. How much of what 148 00:07:36,116 --> 00:07:39,076 Speaker 1: you eat do you order from? I order Go Puff 149 00:07:39,076 --> 00:07:41,916 Speaker 1: between two and four times a day. So wow, I 150 00:07:41,996 --> 00:07:43,796 Speaker 1: was a big user. If you got something on the 151 00:07:43,796 --> 00:07:45,996 Speaker 1: way Now, I ordered in the morning, I got coffee. 152 00:07:46,396 --> 00:07:48,356 Speaker 1: You try and break it, You try and do something 153 00:07:48,396 --> 00:07:50,956 Speaker 1: really hard when you order all the time, all the time. 154 00:07:50,996 --> 00:07:53,196 Speaker 1: I'll order from like a whole bunch of different categories. 155 00:07:53,236 --> 00:07:55,356 Speaker 1: I'll order from items that I know that are not 156 00:07:55,396 --> 00:07:57,996 Speaker 1: located in newar Introl inside of the warehouse. And I 157 00:07:58,036 --> 00:08:00,156 Speaker 1: always order from a pseudo account, so no one notes me. 158 00:08:00,596 --> 00:08:04,796 Speaker 1: So I'm constantly looking at things and then like, you know, 159 00:08:04,876 --> 00:08:07,196 Speaker 1: my operators, I don't know if they love or hate me. Right, 160 00:08:07,956 --> 00:08:11,356 Speaker 1: always always funkle, and you know how we're going to 161 00:08:11,396 --> 00:08:14,636 Speaker 1: move forward. So if your order comes and it's not 162 00:08:14,716 --> 00:08:17,236 Speaker 1: just right, you call the you call the warehouse and 163 00:08:17,276 --> 00:08:20,556 Speaker 1: be like, okay, right, it's not hot. First, I'm trying 164 00:08:20,556 --> 00:08:22,596 Speaker 1: to understand the root cause, right, it's not like like 165 00:08:22,836 --> 00:08:24,516 Speaker 1: what you don't want to do is like this is 166 00:08:24,556 --> 00:08:27,036 Speaker 1: just a blame game of like, hey, this person messed up, 167 00:08:27,076 --> 00:08:30,676 Speaker 1: and like what caused this defect? And then you drill 168 00:08:30,756 --> 00:08:32,796 Speaker 1: in like one or two layers deeper with like was 169 00:08:32,796 --> 00:08:35,556 Speaker 1: it a process issue? Was it a tech issue? Like 170 00:08:35,716 --> 00:08:37,836 Speaker 1: was it a staffing issue? Like like there's a whole 171 00:08:37,876 --> 00:08:41,116 Speaker 1: host of issues that could have caused that problem. Ninety 172 00:08:41,196 --> 00:08:43,436 Speaker 1: five percent at a time, when there's a problem, it's 173 00:08:43,436 --> 00:08:46,196 Speaker 1: within something new that we're trying to do. So it's 174 00:08:46,236 --> 00:08:48,476 Speaker 1: it's activated by me because I'm ordering a lot of 175 00:08:48,476 --> 00:08:50,716 Speaker 1: the new stuff. I want to be testing it, and 176 00:08:50,756 --> 00:08:53,596 Speaker 1: like they'll they'll be issue because it's like it's it's experimenting. 177 00:08:53,676 --> 00:08:56,196 Speaker 1: So like you don't want to like fault people too 178 00:08:56,196 --> 00:08:58,236 Speaker 1: hard for trying and like you want to fail fast 179 00:08:58,236 --> 00:09:00,596 Speaker 1: and learn quickly, you know what I mean. So you 180 00:09:00,596 --> 00:09:03,036 Speaker 1: don't want to hit people too hard for trying stuff 181 00:09:03,036 --> 00:09:04,996 Speaker 1: and not working out the first time around. That's okay, 182 00:09:05,236 --> 00:09:07,116 Speaker 1: you know, I mean, we'll learn and we'll move past them. 183 00:09:07,156 --> 00:09:08,876 Speaker 1: We'll you know, we'll get better. Dex Can you talk 184 00:09:08,836 --> 00:09:13,236 Speaker 1: about out a problem you're trying to solve now, one 185 00:09:13,316 --> 00:09:16,876 Speaker 1: of the hardest problems for us to solve is grocery. 186 00:09:17,076 --> 00:09:21,156 Speaker 1: Grocery meaning basically produce fruits and vegetables. Fruits and vegetables. Yeah, 187 00:09:21,156 --> 00:09:23,476 Speaker 1: so okay, first of all, tell me why it's a problem. 188 00:09:23,516 --> 00:09:25,836 Speaker 1: The products don't have an expiration date, so like a 189 00:09:25,876 --> 00:09:28,316 Speaker 1: banana might start looking bad, you don't want to start 190 00:09:28,356 --> 00:09:31,716 Speaker 1: delivering that product. So it's a whole host of new 191 00:09:31,756 --> 00:09:34,236 Speaker 1: technologies that we have to build in to go inventory, 192 00:09:34,276 --> 00:09:36,396 Speaker 1: to really make sure that, you know, we could deliver 193 00:09:36,516 --> 00:09:40,556 Speaker 1: it properly and profitably. And in two, the retraining of 194 00:09:40,596 --> 00:09:42,956 Speaker 1: all of our associates. You have to train people what 195 00:09:43,156 --> 00:09:44,956 Speaker 1: does a good banana look like versus what a bad 196 00:09:44,956 --> 00:09:46,996 Speaker 1: banana looks like? You know, you can't put it into 197 00:09:47,036 --> 00:09:49,996 Speaker 1: the machine, like you can't automate the meaning of a 198 00:09:49,996 --> 00:09:53,236 Speaker 1: bad banana. Yeah, and in some sense, yes, So okay, 199 00:09:53,276 --> 00:09:56,676 Speaker 1: I'm just gonna pause here and say we're at seven minutes. 200 00:09:56,676 --> 00:10:00,716 Speaker 1: We're do a time check. Seven minutes looks like I 201 00:10:00,756 --> 00:10:02,676 Speaker 1: can actually see It's like when you're, you know, calling 202 00:10:02,716 --> 00:10:05,516 Speaker 1: an uber or something. I can see where the delivery 203 00:10:05,516 --> 00:10:09,316 Speaker 1: guy is and the dude has looks like moved away 204 00:10:09,316 --> 00:10:10,756 Speaker 1: from my house a little bit. So I guess I 205 00:10:10,796 --> 00:10:13,836 Speaker 1: was not first on his list. The order might have 206 00:10:13,876 --> 00:10:16,516 Speaker 1: been batched, so like the keys that still keep it 207 00:10:16,596 --> 00:10:18,836 Speaker 1: in the in the delivery window that they use it. 208 00:10:19,036 --> 00:10:21,316 Speaker 1: Like again, what a lot of people would do, or 209 00:10:21,316 --> 00:10:22,756 Speaker 1: a lot of people that are entering the space for 210 00:10:22,836 --> 00:10:25,636 Speaker 1: the first time would do is just like optimize, like 211 00:10:25,716 --> 00:10:28,516 Speaker 1: bring it as fast as humanly possible, And that might not. 212 00:10:28,556 --> 00:10:30,556 Speaker 1: I don't know what's happening specifically with your order, because 213 00:10:30,556 --> 00:10:32,756 Speaker 1: obviously I'm not I'm not I'm not looking at it. 214 00:10:32,796 --> 00:10:36,116 Speaker 1: But like the reality is is like we're optimizing to 215 00:10:36,236 --> 00:10:39,276 Speaker 1: build the best kind of consumer experience and build a 216 00:10:39,276 --> 00:10:43,916 Speaker 1: long staining, generational, profitable business. So, Okay, you were early 217 00:10:43,996 --> 00:10:46,956 Speaker 1: to this business, and tons of other people with huge 218 00:10:46,956 --> 00:10:49,316 Speaker 1: amounts of money are coming to copy you and do 219 00:10:49,356 --> 00:10:52,196 Speaker 1: what you do, like lots of you know, startup VC 220 00:10:52,316 --> 00:10:54,716 Speaker 1: funded businesses. But I also just read yesterday that like 221 00:10:55,196 --> 00:10:59,196 Speaker 1: Walmart is trying to get into instant delivery, and both 222 00:10:59,236 --> 00:11:02,556 Speaker 1: of those seem like potential problems for you in terms 223 00:11:02,556 --> 00:11:05,276 Speaker 1: of like competition. What I'll tell you is, like I 224 00:11:05,316 --> 00:11:08,076 Speaker 1: mean this in the most amount of respect, right, the 225 00:11:08,196 --> 00:11:10,996 Speaker 1: vast majority players just won't exist six to twelve months 226 00:11:10,996 --> 00:11:13,996 Speaker 1: from now, because the twelve months that is a fuego 227 00:11:14,076 --> 00:11:15,916 Speaker 1: take and you're not saying in five years, you're saying 228 00:11:15,916 --> 00:11:18,516 Speaker 1: in one year. Yeah, not all of them, but most 229 00:11:18,556 --> 00:11:21,676 Speaker 1: of them. And here's why. Right, this business, if you 230 00:11:21,796 --> 00:11:25,036 Speaker 1: don't focus on building out the tech early, and you 231 00:11:25,076 --> 00:11:29,236 Speaker 1: don't focus on fundamental economics early, right before you scale 232 00:11:29,276 --> 00:11:31,996 Speaker 1: the business, it's a fricking disaster. Right. You could be 233 00:11:32,036 --> 00:11:35,156 Speaker 1: losing twenty thirty forty dollars every order that you deliver. 234 00:11:35,796 --> 00:11:37,756 Speaker 1: So the easiest thing to do is to open up 235 00:11:37,876 --> 00:11:40,556 Speaker 1: the building, right, the hardest, like, it's much harder to 236 00:11:40,596 --> 00:11:43,796 Speaker 1: operate these buildings and operate improfitability and to deliver against 237 00:11:43,836 --> 00:11:46,796 Speaker 1: the consumer promise every single time. And that took again, 238 00:11:46,836 --> 00:11:48,476 Speaker 1: that took us a lot of years and a lot 239 00:11:48,516 --> 00:11:50,596 Speaker 1: of iteration, a lot of work to do. So I 240 00:11:50,676 --> 00:11:52,716 Speaker 1: just I just know what it takes to build a 241 00:11:52,756 --> 00:11:56,676 Speaker 1: business like this, and if you don't invest in the 242 00:11:57,076 --> 00:12:03,156 Speaker 1: fundamentals of the business early, the results are disastrous. My 243 00:12:03,316 --> 00:12:06,316 Speaker 1: order is still on the way, apparently according to the app. 244 00:12:06,556 --> 00:12:09,236 Speaker 1: The clock is still ticking, and we'll be back or 245 00:12:09,236 --> 00:12:11,716 Speaker 1: a break to talk about more problems and see how 246 00:12:11,716 --> 00:12:20,196 Speaker 1: long it takes my order to arrive, and now back 247 00:12:20,236 --> 00:12:23,276 Speaker 1: to my interview with Raphael. I will say, for those 248 00:12:23,316 --> 00:12:25,716 Speaker 1: of you keeping score at home tracking my order of 249 00:12:25,756 --> 00:12:28,556 Speaker 1: oreos and apples, we're going to skip ahead a few 250 00:12:28,556 --> 00:12:31,956 Speaker 1: minutes here and pick up the interview around twenty eight 251 00:12:31,956 --> 00:12:35,316 Speaker 1: minutes after I placed the order. At this point in 252 00:12:35,356 --> 00:12:39,036 Speaker 1: the conversation, we're discussing Gopuff's acquisition of this liquor store 253 00:12:39,116 --> 00:12:42,636 Speaker 1: chain called Bevmo. Gopuff made the acquisition a couple of 254 00:12:42,676 --> 00:12:45,356 Speaker 1: years ago. It costs them three hundred and fifty million 255 00:12:45,396 --> 00:12:48,836 Speaker 1: dollars and go Puff has been trying to solve this problem. 256 00:12:49,196 --> 00:12:52,476 Speaker 1: How do you keep this liquor store chain running as 257 00:12:52,556 --> 00:12:55,236 Speaker 1: retail stores where customers can go and chop well at 258 00:12:55,236 --> 00:12:58,476 Speaker 1: the same time using the stores as microwarehouses for its 259 00:12:58,476 --> 00:13:00,996 Speaker 1: delivery business. The reason we bought it was because of 260 00:13:00,996 --> 00:13:04,636 Speaker 1: the liquor licenses, so we could deliver alcohol in California 261 00:13:04,676 --> 00:13:06,156 Speaker 1: in an easy way. And we did the same thing 262 00:13:06,196 --> 00:13:08,636 Speaker 1: in Kentucky with a chain called Liquor Barn, and we 263 00:13:09,116 --> 00:13:12,836 Speaker 1: where did these retail locations And our biggest problem, and 264 00:13:12,876 --> 00:13:14,836 Speaker 1: the problem that we still have today, is how do 265 00:13:14,836 --> 00:13:18,156 Speaker 1: you keep the integrity of the retail location while making 266 00:13:18,156 --> 00:13:20,476 Speaker 1: it into what we call an omni store. So the 267 00:13:20,596 --> 00:13:23,556 Speaker 1: store like a micro of a filment center within a 268 00:13:23,716 --> 00:13:27,396 Speaker 1: very popular chain. Right, that's producing hundreds of millions of revenue. 269 00:13:27,796 --> 00:13:29,876 Speaker 1: What's an example of the thing that went wrong in 270 00:13:29,916 --> 00:13:32,756 Speaker 1: that in that setting? So I'll give a like an example. 271 00:13:32,836 --> 00:13:36,116 Speaker 1: Let's say like something exists on the store shelf. Right, 272 00:13:36,116 --> 00:13:38,676 Speaker 1: we never had walking customers before, and we have an 273 00:13:38,716 --> 00:13:42,196 Speaker 1: active inventory account that's integrated between bevmo and Gopa. Let's 274 00:13:42,396 --> 00:13:44,396 Speaker 1: let's say a customer there's a one bottle of something 275 00:13:44,476 --> 00:13:46,836 Speaker 1: left and he took it, and it's physically in the cart, 276 00:13:46,916 --> 00:13:49,756 Speaker 1: in someone's cart, So the inventory system is saying there 277 00:13:49,876 --> 00:13:52,436 Speaker 1: is one of these bottles that exists in the shelf. 278 00:13:52,476 --> 00:13:54,676 Speaker 1: So I go on the app and the app is like, yeah, 279 00:13:54,716 --> 00:13:56,876 Speaker 1: you can buy that bottle of whiskey, and I pushed 280 00:13:56,956 --> 00:14:00,276 Speaker 1: the order and then somebody who works then then would happen. 281 00:14:00,276 --> 00:14:02,236 Speaker 1: They would go to the shelf, they would scan the shelf, 282 00:14:02,276 --> 00:14:03,956 Speaker 1: they would look at the shelf and there's no bottle there. 283 00:14:04,396 --> 00:14:06,476 Speaker 1: So that like, that's what we call an inventory defect. 284 00:14:06,476 --> 00:14:09,356 Speaker 1: But the defect shouldn't exist because the bottle physically, like 285 00:14:09,516 --> 00:14:11,836 Speaker 1: the way that we solve that problem is like anything 286 00:14:11,956 --> 00:14:14,916 Speaker 1: under a certain amount, we're just gonna market out of 287 00:14:14,956 --> 00:14:18,076 Speaker 1: stock because we're not so sure one or two bottles left. 288 00:14:18,076 --> 00:14:20,796 Speaker 1: You just don't let anyone we're gonna market out of stock. 289 00:14:20,996 --> 00:14:23,156 Speaker 1: And like that took us, like we didn't we thought 290 00:14:23,156 --> 00:14:25,676 Speaker 1: there was something wrong with the system. And then the 291 00:14:26,396 --> 00:14:29,276 Speaker 1: engineers and product folks and everything we laugh about this 292 00:14:29,276 --> 00:14:31,236 Speaker 1: all the time. The best person to fix a packing 293 00:14:31,276 --> 00:14:34,036 Speaker 1: problem is the person that's packing the order, right, So 294 00:14:34,076 --> 00:14:35,876 Speaker 1: it took us speaking to the people in the ground 295 00:14:36,196 --> 00:14:37,956 Speaker 1: to like be like, hey, like what's wrong with it 296 00:14:38,076 --> 00:14:40,196 Speaker 1: with this, Like like wait, there's something wrong with our 297 00:14:40,236 --> 00:14:42,876 Speaker 1: inventory management software, and like somebody worked in the store. 298 00:14:42,876 --> 00:14:45,316 Speaker 1: It's like no, man, somebody some customer just had the 299 00:14:45,356 --> 00:14:48,556 Speaker 1: bottle in their cart. What that's literally exactly what happened. 300 00:14:48,676 --> 00:14:52,316 Speaker 1: Instead of like going to the MFC's and really figuring 301 00:14:52,356 --> 00:14:56,636 Speaker 1: out what the problem is, yeah, the stores, Yeah, yeah, 302 00:14:56,836 --> 00:14:58,316 Speaker 1: we try to solve it an HQ and that just 303 00:14:58,356 --> 00:15:02,276 Speaker 1: didn't work. So like you gotta have a bottoms up approaching. Sorry, 304 00:15:02,276 --> 00:15:04,396 Speaker 1: I apologize, but I have to interrupt. Were at thirty 305 00:15:04,396 --> 00:15:07,236 Speaker 1: one minutes. I'm gonna stop to stop watch. Just got 306 00:15:07,236 --> 00:15:10,116 Speaker 1: a text your non content Go Puff order has been 307 00:15:10,116 --> 00:15:13,236 Speaker 1: delivered to the address you provide it. You want to 308 00:15:13,276 --> 00:15:15,796 Speaker 1: just hold on one sack. I'm gonna go downstairs and 309 00:15:15,836 --> 00:15:34,316 Speaker 1: get it. Great, you're right back, and now back to 310 00:15:34,356 --> 00:15:36,316 Speaker 1: the show. I just went to get my order from 311 00:15:36,356 --> 00:15:48,116 Speaker 1: Go Puff. I think it worked. Let's see. Okay, let's see. 312 00:15:49,076 --> 00:15:52,756 Speaker 1: I love this. Yeah, right, it's action. It's like this 313 00:15:52,836 --> 00:15:58,996 Speaker 1: is this okay? So let's see at the apples. You'd 314 00:15:58,996 --> 00:16:02,316 Speaker 1: be glad to know the apples look good. Great, we'll 315 00:16:02,316 --> 00:16:06,916 Speaker 1: do the apple test here, you're ready, good crunch or 316 00:16:07,036 --> 00:16:11,956 Speaker 1: good apple? And we got the orioles. I love it. Yeah, 317 00:16:11,996 --> 00:16:17,076 Speaker 1: it worked. Were you worried at all? I think there's 318 00:16:17,116 --> 00:16:20,636 Speaker 1: like like like a sub level of worry, especially about 319 00:16:20,676 --> 00:16:25,476 Speaker 1: the apples because it's a new business. Great, let's do 320 00:16:25,556 --> 00:16:27,556 Speaker 1: a lightning round. We close this show with like a 321 00:16:27,596 --> 00:16:30,956 Speaker 1: bunch of fast questions, just fast. What's one piece of 322 00:16:30,956 --> 00:16:33,236 Speaker 1: advice you'd give to somebody trying to solve a hard problem? 323 00:16:33,916 --> 00:16:37,236 Speaker 1: Listen more than you talk. What's the hardest thing about 324 00:16:37,356 --> 00:16:41,716 Speaker 1: growing is physical real world business? Insanely quickly. I mean 325 00:16:41,796 --> 00:16:44,196 Speaker 1: I'm thinking I'm talking from my perspective more than anything else. 326 00:16:44,436 --> 00:16:48,316 Speaker 1: We're working sixteen seventeen hour days, seven days a week. Yeah, 327 00:16:48,436 --> 00:16:51,756 Speaker 1: and after months and months of doing it, it just waited, 328 00:16:51,916 --> 00:16:54,356 Speaker 1: Like you're like, the business hasn't gone into the place 329 00:16:54,356 --> 00:16:56,276 Speaker 1: where we got we wanted to get to, wen't raise 330 00:16:56,356 --> 00:16:59,996 Speaker 1: any money, and like you start to deteriorate a little bit, 331 00:17:00,036 --> 00:17:02,836 Speaker 1: you know what I mean, Like remaining mentally strong as 332 00:17:02,836 --> 00:17:06,836 Speaker 1: you're building these operationally complex businesses, especially if you're acting 333 00:17:06,876 --> 00:17:11,716 Speaker 1: as a founder operator, is probably one of the hardest challenges. 334 00:17:12,196 --> 00:17:15,356 Speaker 1: What's a thing in the world outside of your business 335 00:17:15,436 --> 00:17:18,516 Speaker 1: that you think should be faster. Maybe transportation probably should 336 00:17:18,516 --> 00:17:21,996 Speaker 1: be faster, right Like we had we had concords twenty 337 00:17:22,076 --> 00:17:24,556 Speaker 1: years ago, and I think we took a step backwards 338 00:17:24,636 --> 00:17:28,316 Speaker 1: on transportation. If everything goes well, what problem will you 339 00:17:28,356 --> 00:17:31,396 Speaker 1: be trying to solve in say five years. So I think, 340 00:17:31,756 --> 00:17:35,036 Speaker 1: you know, gobus business can become a lot more broad 341 00:17:35,316 --> 00:17:37,916 Speaker 1: than just what we're doing right now. What I mean 342 00:17:37,956 --> 00:17:39,916 Speaker 1: by that like if you look at Amazon's business right 343 00:17:39,956 --> 00:17:43,756 Speaker 1: like FBA fulfilled by Amazon is larger now than the 344 00:17:43,796 --> 00:17:49,356 Speaker 1: retail business than Amazon owned products. And by owning all 345 00:17:49,396 --> 00:17:52,476 Speaker 1: the infrastructure, we're starting to think about, like, you know, 346 00:17:52,556 --> 00:17:55,356 Speaker 1: what are ways that we can utilize all the infrastructure 347 00:17:55,356 --> 00:17:58,476 Speaker 1: and all the technology that we built to empower a 348 00:17:58,596 --> 00:18:02,636 Speaker 1: whole host of e commerce websites to power their delivery. 349 00:18:03,436 --> 00:18:05,316 Speaker 1: How will you know when it's time for you personally 350 00:18:05,356 --> 00:18:07,756 Speaker 1: to do something else. You know, it's a great question. 351 00:18:08,316 --> 00:18:10,236 Speaker 1: I used to think about that kind of all the time. 352 00:18:10,276 --> 00:18:11,956 Speaker 1: I think, you know, you get one chan unless you're 353 00:18:11,956 --> 00:18:13,636 Speaker 1: like Elon Musk, right, you get like one chance in 354 00:18:13,676 --> 00:18:17,316 Speaker 1: life to build something really really generational. And when I 355 00:18:17,316 --> 00:18:20,076 Speaker 1: said generation, I mean multi hundred billions in market cap 356 00:18:20,756 --> 00:18:22,756 Speaker 1: and like a lot of magic needs to happen for 357 00:18:22,756 --> 00:18:26,436 Speaker 1: you to get like timing, product, market fit, resources, damn, 358 00:18:26,556 --> 00:18:30,316 Speaker 1: Like a whole bunch of things need to like come together. 359 00:18:30,676 --> 00:18:32,236 Speaker 1: I'm not embarrassed to say I don't think I'll be 360 00:18:32,276 --> 00:18:35,836 Speaker 1: able to do this again at this Yeah, Like I 361 00:18:35,876 --> 00:18:38,596 Speaker 1: think this is our chance to do something really really 362 00:18:38,596 --> 00:18:41,236 Speaker 1: a generational once once in a lifetime. And it's like 363 00:18:41,396 --> 00:18:43,996 Speaker 1: it's so much bigger than money. It's so much bigger 364 00:18:44,036 --> 00:18:46,516 Speaker 1: than you know, like how I'm gonna feel on how 365 00:18:46,556 --> 00:18:49,876 Speaker 1: I'm gonna behave if I sold this thing. So I 366 00:18:49,916 --> 00:18:51,996 Speaker 1: love doing this, not sounding a cliche, but like I 367 00:18:52,116 --> 00:18:54,476 Speaker 1: really enjoyed doing this more than anything. I don't really 368 00:18:54,476 --> 00:18:58,956 Speaker 1: have any other hobbies. It's a good thing, working sixteen 369 00:18:58,996 --> 00:19:01,596 Speaker 1: hours a day. Right, It's like family and go Puff 370 00:19:01,916 --> 00:19:05,036 Speaker 1: and most like go Puff. It sounds like, yeah, I 371 00:19:05,076 --> 00:19:08,436 Speaker 1: mean this is my life, so you know, it's uh. 372 00:19:09,276 --> 00:19:11,276 Speaker 1: I can't even imagine right now life would out it 373 00:19:11,516 --> 00:19:14,516 Speaker 1: as crazy as that sounds. Thank you very much. Great 374 00:19:14,556 --> 00:19:20,916 Speaker 1: to talk guys. Thank you. Rafael ilishaiyev Is, co founder 375 00:19:20,916 --> 00:19:25,756 Speaker 1: and co CEO of Gopuff. Today's show was produced by 376 00:19:25,916 --> 00:19:28,836 Speaker 1: Edith Russolo, engineered by Amanda ka Wong, and edited by 377 00:19:28,916 --> 00:19:32,116 Speaker 1: Robert Smith. The music by Luis Gara. What's Your Problem 378 00:19:32,196 --> 00:19:35,836 Speaker 1: is a co production of iHeartMedia and Pushkin Industries. If 379 00:19:35,836 --> 00:19:38,396 Speaker 1: you like the show, please leave a review or rate 380 00:19:38,476 --> 00:19:41,196 Speaker 1: us on whatever app you're using to listen. If you 381 00:19:41,276 --> 00:19:43,396 Speaker 1: do not like the show, I've taken enough of your 382 00:19:43,396 --> 00:19:46,396 Speaker 1: time already, no need to leave a raining. I'm Jacob 383 00:19:46,396 --> 00:19:49,156 Speaker 1: Goldstein and I'll be back next week with another episode 384 00:19:49,156 --> 00:19:54,516 Speaker 1: of What's Your Problem.