20VC: The GoPuff Memo: Why 10-15 Minute Delivery is an Unsustainable Model, The Plan to Make GoPuff Profitable by 2024, Mistakes Made in Europe and What the Europe Plan Should Have Been and What Does Quick Commerce Look Like in 5 Years with Rafael Illisha
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
The Twenty Minute VC
4.4 • 637 Ratings
🗓️ 2 November 2022
⏱️ 43 minutes
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Summary
Raf Illishayev is the Co-Founder and CEO @ GoPuff, one of the market leaders delivering daily essentials in minutes. GoPuff’s latest funding round priced the company at a reported $8.9Bn in March 2021 and to date, Rafael has raised over $2.4Bn for the company from the likes of Accel, Softbank, Fidelity, Baillie Gifford, D1 Capital and more. Rafael has scaled the company to over 1/3 of the US with over 12,000 employees nationwide.
In Today’s Episode with GoPuff's Rafael Ilishayev You Will Learn:
1.) From Student to Global CEO:
- How Raf came up with the idea for GoPuff and started the company as a student with no funding?
- What were the early signs of product-market fit that Raf observed in the early days?
- In hindsight, does Raf wish they had raised external funding sooner than they did? What would raising external funding sooner have changed about the way they run the business?
2.) The Rise and Fall of Quick Commerce:
- What are the core drivers that have led to capital drying up for players in the quick commerce space?
- With the changing environment, is it a race to profitability for all providers in the space?
- Is this the perfect time for GoPuff to acquire? What are the characteristics of businesses in the space that GoPuff would vs would not like to acquire?
- How does Raf see the quick commerce space looking in 5 years time?
3.) Getting to Profitability: The Levers That Matter:
- Customer Service: Why does Raf believe that all players pulling back on investing in customer service are making a massive mistake? What can be done instead?
- Delivery Time: Why does Raf believe the 10-minute delivery model is fundamentally unprofitable? How do GoPuff approach it as a result?
- Inventory: With a changing macro-environment, why does Raf believe it is prudent to focus more attention on alcohol and convenience goods? What do prior recessions show us about consumer spending patterns changing?
- Metrics: What are the single most important metrics which dictate the speed of getting to profitability? Why is the amount of orders a driver can deliver per hour the most important metric?
4.) Business Expansion Opportunities:
- How does Raf analyze the opportunity for GoPuff in Europe?
- Why does Raf believe they should have pulled out of Spain much sooner? Why are they so focused on the UK now?
- Why does Raf believe it is the right decision to stop investing in GoPuff pharmacy?
- Why is Raf so bullish on GoPuff kitchens? How does the unit economics of the kitchens compare to the core business for GoPuff? What are the positive effects of kitchens on GoPuff core product?
- What was the most recent disagreement the board has had when it comes to determining what to prioritize vs what not to?
Mentioned in Today's GoPuff Episode:
Raf's Mentor and Advisor: Emil Michael, Former Chief Business Officer @ Uber
Transcript
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| 0:00.0 | The consumer was almost taught 10 or 15 minute delivery is a norm. |
| 0:04.6 | That's not a sustainable business model. |
| 0:07.0 | We built a new financial model that's completely self-funded. |
| 0:10.8 | One that doesn't require any more outside capital, one that only looks at our balance sheet. |
| 0:14.8 | Wow, this is such a good show. |
| 0:16.3 | This is 20VC, the GoPuff Memo, the monthly show where we deep dive on the business model of one company and really go deep. And today, as I mentioned, we're going deep on the GoPuff memo, the monthly show where we deep dive on the business model of one company |
| 0:21.5 | and really go deep. And today, as I mentioned, we're going deep on the GoPuff business model |
| 0:26.0 | with Raph Illishayev, co-founder and CEO at GoPuff, one of the market leaders delivering |
| 0:30.8 | daily essentials in minutes. GoPuff's latest funding round, price the company and |
| 0:34.9 | the company are reported $8.9 billion in March 2021. And to date, |
| 0:39.3 | Raff has raised over $2.4 billion for the company from the likes of Excel, soft bank, |
| 0:43.9 | Fidelity, Bailey Gifford and more. And Raff has scaled the company to over one third of the US |
| 0:49.2 | with over 12,000 employees nationwide. But before we dive into the show stay, we will hope we never need |
| 0:55.2 | life insurance, but for me, nothing is more important than my family and knowing they will be |
| 0:59.7 | protected and looked after. If you follow my Twitter, you know how close I am to my mother, |
| 1:03.8 | and mortgage payments and other expenses, they don't disappear when you're gone. And life insurance |
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... |
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