The Exchanges

Q Now, I want to start off with a little bit of a creation story behind Sprigg. So, so how did this come about, and what's the origins for you as the founder?

A Yeah, totally. So, uh, you know, I, uh, started a company, uh, I started Udemy about seven years ago, and, uh, like many sort of young professionals, I was working, uh, extremely hard, and after I left the company, I took, uh, six months off, and one of the main things I did was a personal reassessment. I realized I'd gained about 20 pounds eating too much, too much crappy food. Uh, the reason for that is that the food business has created this false dichotomy for consumers where either they get something that's good and it's expensive and it takes a lot of time and effort, or, uh, you can get something that's cheap and convenient, um, but it's terrible for you. And that dichotomy has, uh, forced people like me who were, who were busy at the time to, uh, really have to choose and make an unfair choice. And so when one of my best friends from growing up called me and said, Hey, what do you think about This idea of lift for food, this idea of making, uh, great food convenient and easy, you know, at the touch of a button, I immediately thought it was, it resonated with me, and I, uh, decided to join him, and we started the company.

AI assessment note: “one of my best friends from growing up called me... and we started the company.”

Q And then penultimate question. If you could improve one founder aspect of yourself, what would you improve?

A Oh man. You know, I think, I think there's, there's certainly a real positive to being someone who is aggressive and hard charging and wants to get, you know, wants to win. I think that's certainly a characteristic that I exude. I think sometimes that can result in moving a little too quickly. And I think patience is something that is, I'm learning is just as important as aggressiveness. And I'm learning to have both at the same time. And it's definitely one of my biggest Lessons for, for myself and particularly when managing a team, you know, it's very different when you're managing yourself or just five people, you're working together, everyone, you know, it's very different, but now we have hundreds of employees at Sprig and you just have to be much more patient and responsible about how you make decisions and how intentional you are about planning.

AI assessment note: “patience is something that is, I'm learning is just as important as aggressiveness.”

Q Now, I want to start off with a little bit of a creation story behind Sprigg. So, so how did this come about, and what's the origins for you as the founder?

A Yeah, totally. So, uh, you know, I, uh, started a company, uh, I started Udemy about seven years ago, and, uh, like many sort of young professionals, I was working, uh, extremely hard, and after I left the company, I took, uh, six months off, and one of the main things I did was a personal reassessment. I realized I'd gained about 20 pounds eating too much, too much crappy food. Uh, the reason for that is that the food business has created this false dichotomy for consumers where either they get something that's good and it's expensive and it takes a lot of time and effort, or, uh, you can get something that's cheap and convenient, um, but it's terrible for you. And that dichotomy has, uh, forced people like me who were, who were busy at the time to, uh, really have to choose and make an unfair choice. And so when one of my best friends from growing up called me and said, Hey, what do you think about This idea of lift for food, this idea of making, uh, great food convenient and easy, you know, at the touch of a button, I immediately thought it was, it resonated with me, and I, uh, decided to join him, and we started the company.

AI assessment note: “when one of my best friends from growing up called me... we started the company”

Q Now, in the theme of Greylock Week, it would be wrong not to feature some of the Greylock team, so Josh Elman from Greylock did have a question for you. So he wanted to know, speaking of the food itself there, what lessons you've learned from Chipotle, Both with their growth and with the recent challenges that they've faced?

A Yeah, no, it's a, it's a great question. So, you know, Chipotle is obviously, uh, it's a fascinating story, and there's really two parts to what we've learned from them, both What they've done well and then what they've had challenges with. So first I think what they've done well is they've built a system, um, in the store and that's really from a business perspective about optimizing revenue per square foot. So it's one of the highest revenue per square foot sort of fast casual retail options out there. And what makes that particularly interesting is because they're able to make these burritos quickly and get people through a line, You know, they're extremely efficient operationally and yet still have a product that people love, um, which is particularly special. And then the second thing, the challenge they've had is as they've been using more, uh, unprocessed ingredients, right? They're using meat that's, uh, you know, antibiotic free. They're sourcing, um, produce in a response, in a responsible way. As they're doing this, they're running into challenges, which is that at scale, this type of food has a much higher likelihood of incident rates, um, And what you have to do is you have to build, ah, technology, what we're doing at Sprig is we're building technology that allows us to, at this scale, it's not very relevant, um, but when we're in 30, 40 markets, we'll have techno…

AI assessment note: “there's really two parts to what we've learned from them”

Q And you said there about kind of selling it to the VCs. How did you present that vision in the cool days when you You know, on demand was very hot. Food delivery was hot. What was it that separated you from, from everyone else doing, not the same, because I would argue the quality is different, um, but, uh, from food delivery, what was the differentiator, do you think?

A Yeah, I mean, I think our approach, uh, though there were a couple companies with that approach, you know, the, the, you have to, it's kind of a two-phase process. First, you have to convince, you know, in this case, Greylock, um, And social capital at Sprig, we have to convince them that your approach is the right approach, and then you have to convince them you're the best company within that competitive set across that approach. And the first one, you know, I think that we, our argument is that the value proposition that Sprig provides is unique and differentiated from any other value proposition you can get in food today. It has the opportunity as it scales to become more convenient, lower priced, And better quality, which are the three, three measures I view consumers make their decisions based on. So we can be more convenient, cheaper, and better quality than what you can get in modern food, in the modern food landscape. That's a huge reason why the vertically integrated approach is the right approach, in my opinion. And then the second part of this is how do you compare Sprig to other vertically integrated players? And we did that by showing them our execution. I think both Greylock and Social Capital felt like The execution of the team that we built here with, you know, all of the people at Sprig who work hard to build this business, you know, this team is, is probably …

AI assessment note: “how do you compare Sprig to other vertically integrated players? And we did that”

Q Now, in the theme of Greylock Week, it would be wrong not to feature some of the Greylock team, so Josh Elman from Greylock did have a question for you. So he wanted to know, speaking of the food itself there, what lessons you've learned from Chipotle, Both with their growth and with the recent challenges that they've faced?

A Yeah, no, it's a, it's a great question. So, you know, Chipotle is obviously, uh, it's a fascinating story, and there's really two parts to what we've learned from them, both What they've done well and then what they've had challenges with. So first I think what they've done well is they've built a system, um, in the store and that's really from a business perspective about optimizing revenue per square foot. So it's one of the highest revenue per square foot sort of fast casual retail options out there. And what makes that particularly interesting is because they're able to make these burritos quickly and get people through a line, You know, they're extremely efficient operationally and yet still have a product that people love, um, which is particularly special. And then the second thing, the challenge they've had is as they've been using more, uh, unprocessed ingredients, right? They're using meat that's, uh, you know, antibiotic free. They're sourcing, um, produce in a response, in a responsible way. As they're doing this, they're running into challenges, which is that at scale, this type of food has a much higher likelihood of incident rates, um, And what you have to do is you have to build, ah, technology, what we're doing at Sprig is we're building technology that allows us to, at this scale, it's not very relevant, um, but when we're in 30, 40 markets, we'll have techno…

AI assessment note: “there's really two parts to what we've learned from them”

Q And then before we dive into a quick fire round, I just want to finish on a more holistic overview of, we mentioned Lyft earlier and discussing your time at Lyft and co-founding Udemy. What were the biggest takeaways of those experiences building such phenomenal companies that you took and applied going into Sprig?

A Yeah, I mean, I think, you know, at Udemy, the biggest lesson was that all, all consumer businesses are about growth, and I learned every part of growth marketing, and I got the opportunity to run every type of, you know, a ton of different marketing channels, not every marketing channel, but a ton of them, you know, from, ah, business development channels, like making small-scale email partnerships, to doing paid acquisition, To doing retention and referral marketing, and really got the opportunity to learn how to build a team of marketers who can go and build a really big consumer business, and then at Lyft, what was fascinating was I, you know, I had a very small impact on Lyft. I was a growth marketer there, but really what I got to do was learn from the team there, and the team taught me about brand and about having a soul, and I think one thing that I just really admire the Lyft founders and the team is how mission-driven they were from day one on making You know, car ownership, uh, not be an expectation for modern society, but also at the, but simultaneously providing opportunities for, you know, hundreds of thousands or, you know, eventually I think it'll be millions of drivers out there to be able to make some extra income and fill their seats. And, you know, that, um, that shows in the way that Lyft, uh, presents itself publicly in the way they run the company. And so…

AI assessment note: “Both have focused a lot on building a growth machine... and making sure that we have a real true core mission”

Q And did you find the alignment in terms of meeting timings created a sense of kind of urgency and hot Around your deal between the VCs?

A Yes, of course. So we, what I do is I tell, if I'm entering a strict fundraising process, and there are times where you just talk to VCs casually, get to know them, Whatever. But if you're actually entering a strict fundraising process, usually, um, my philosophy is to have a very clear timeline with them. So I will literally tell them, hey, I expect this process to last three to four weeks, and we're starting our first meetings, you know, next week. We'd love to have you there, and we'd love to meet with you. And then we'll go and do all the first meetings the first week, and sometimes you'll have second meetings, but usually they'll happen the second week. And then as the process is going on, you start to realize whether or not it's going to take you three weeks, four weeks, or six weeks, you know, to do the process. And once you figure that out, you start to tell everyone, hey, you know, things are going pretty well. We've got four firms interested, or we got two firms we're talking to, or you're talking to, you know, we're going to make a decision by next week, and we'd like to make sure that you have the opportunity to be there during that timeline, because we really like you, and we want to We wouldn't be continuing to talk to you if we didn't continue to want, uh, you know, if we didn't think you were an interesting partner for us. We, I very clearly manage the timelines…

AI assessment note: “Yes, of course. So we, what I do is I tell, if I'm entering”

Q And I have to ask about the market now. And obviously I'm a huge fan of, uh, Jason Calacanis, ex guest of the shows this week in startups. And on his show, you were very bullish in stating that it's a winner takes all market in terms of the food delivery in the space that you're in. So what makes you say that?

A Yeah, I mean, so I think that ultimately, if you look at the story of Amazon, um, or Uber, Sprig has a lot in common with that in terms of what market we're facing, which is a market where you would not necessarily expect that the, uh, that it would be winner-take-all by virtue of the fact that it doesn't have the same kind of network effects. I mean, Uber certainly has some, and Amazon has some, but they're not nearly as strong as the network effects of, say, a Facebook. But at the same time, what people forget is just how Difficult it is to successfully provide the products that Uber, Amazon, and Sprig do, and then simultaneously why that difficulty means that economies of scale really become a competitive advantage and create a moat for your business. So the same way that, you know, a company like Coca-Cola or Procter & Gamble uses branding as a competitive advantage, and you never think of that as a Internet entrepreneur, you wouldn't think of brand as a real competitive image, but it is. You know, it's very hard to penetrate Coca-Cola just because of the name recognition. Those same types of things can create a moat in, uh, food delivery, and I think branding is one of them, but I think the other thing is just economies of scale. As we get bigger and bigger and bigger, Sprig will be faster, cheaper, and better quality, and eventually the new, you know, the five years from …

AI assessment note: “economies of scale really become a competitive advantage and create a moat for your business”

Q And I have to ask about the market now. And obviously I'm a huge fan of, uh, Jason Calacanis, ex guest of the shows this week in startups. And on his show, you were very bullish in stating that it's a winner takes all market in terms of the food delivery in the space that you're in. So what makes you say that?

A Yeah, I mean, so I think that ultimately, if you look at the story of Amazon, um, or Uber, Sprig has a lot in common with that in terms of what market we're facing, which is a market where you would not necessarily expect that the, uh, that it would be winner-take-all by virtue of the fact that it doesn't have the same kind of network effects. I mean, Uber certainly has some, and Amazon has some, but they're not nearly as strong as the network effects of, say, a Facebook. But at the same time, what people forget is just how Difficult it is to successfully provide the products that Uber, Amazon, and Sprig do, and then simultaneously why that difficulty means that economies of scale really become a competitive advantage and create a moat for your business. So the same way that, you know, a company like Coca-Cola or Procter & Gamble uses branding as a competitive advantage, and you never think of that as a Internet entrepreneur, you wouldn't think of brand as a real competitive image, but it is. You know, it's very hard to penetrate Coca-Cola just because of the name recognition. Those same types of things can create a moat in, uh, food delivery, and I think branding is one of them, but I think the other thing is just economies of scale. As we get bigger and bigger and bigger, Sprig will be faster, cheaper, and better quality, and eventually the new, you know, the five years from …

AI assessment note: “difficulty means that economies of scale really become a competitive advantage and create a moat”

Q And you said there about kind of selling it to the VCs. How did you present that vision in the cool days when you You know, on demand was very hot. Food delivery was hot. What was it that separated you from, from everyone else doing, not the same, because I would argue the quality is different, um, but, uh, from food delivery, what was the differentiator, do you think?

A Yeah, I mean, I think our approach, uh, though there were a couple companies with that approach, you know, the, the, you have to, it's kind of a two-phase process. First, you have to convince, you know, in this case, Greylock, um, And social capital at Sprig, we have to convince them that your approach is the right approach, and then you have to convince them you're the best company within that competitive set across that approach. And the first one, you know, I think that we, our argument is that the value proposition that Sprig provides is unique and differentiated from any other value proposition you can get in food today. It has the opportunity as it scales to become more convenient, lower priced, And better quality, which are the three, three measures I view consumers make their decisions based on. So we can be more convenient, cheaper, and better quality than what you can get in modern food, in the modern food landscape. That's a huge reason why the vertically integrated approach is the right approach, in my opinion. And then the second part of this is how do you compare Sprig to other vertically integrated players? And we did that by showing them our execution. I think both Greylock and Social Capital felt like The execution of the team that we built here with, you know, all of the people at Sprig who work hard to build this business, you know, this team is, is probably …

AI assessment note: “we can be more convenient, cheaper, and better quality”

Q And then before we dive into a quick fire round, I just want to finish on a more holistic overview of, we mentioned Lyft earlier and discussing your time at Lyft and co-founding Udemy. What were the biggest takeaways of those experiences building such phenomenal companies that you took and applied going into Sprig?

A Yeah, I mean, I think, you know, at Udemy, the biggest lesson was that all, all consumer businesses are about growth, and I learned every part of growth marketing, and I got the opportunity to run every type of, you know, a ton of different marketing channels, not every marketing channel, but a ton of them, you know, from, ah, business development channels, like making small-scale email partnerships, to doing paid acquisition, To doing retention and referral marketing, and really got the opportunity to learn how to build a team of marketers who can go and build a really big consumer business, and then at Lyft, what was fascinating was I, you know, I had a very small impact on Lyft. I was a growth marketer there, but really what I got to do was learn from the team there, and the team taught me about brand and about having a soul, and I think one thing that I just really admire the Lyft founders and the team is how mission-driven they were from day one on making You know, car ownership, uh, not be an expectation for modern society, but also at the, but simultaneously providing opportunities for, you know, hundreds of thousands or, you know, eventually I think it'll be millions of drivers out there to be able to make some extra income and fill their seats. And, you know, that, um, that shows in the way that Lyft, uh, presents itself publicly in the way they run the company. And so…

AI assessment note: “when we started Sprig, you know, we, uh, Both have focused a lot”

Q And then talking of the next stage on from there then, once you've nailed that model and you're looking then to expand aggressively into new markets, how do you decide which ones to expand to first? Is it Chicago because it's rainy and cold and people don't want to go out? Or what's the kind of, is there a scientific approach to it?

A Yeah, I mean, You know, you look at a number of factors. I think the, the, the overall, uh, thing you're looking for is which city is the most likely to succeed, right? So really, you just want to say, hey, you know, if you're going in your second market, you want to pick a market that you know is going to be successful because you don't get that many chances to have a second market. Um, and once you get to the third, fourth, and fifth market, then you start to think about other things. So, you know, in our third market, one of the big things we're trying to think about is, okay, there are lots of other food delivery companies. Should we go after a market that is underserved, Right, and prove that Sprig works anywhere Uh, even in a market that's maybe less so well known than say, you know, a Chicago, or do we go after the biggest possible market size? And I think those are questions that are very case by case and depend on how much capital you want to put into a market versus how much time you have and, and how many, what your other, what the other companies in the space are doing. It really depends on the situation.

AI assessment note: “questions that are very case by case and depend on how much capital”

Q And then talking of the next stage on from there then, once you've nailed that model and you're looking then to expand aggressively into new markets, how do you decide which ones to expand to first? Is it Chicago because it's rainy and cold and people don't want to go out? Or what's the kind of, is there a scientific approach to it?

A Yeah, I mean, You know, you look at a number of factors. I think the, the, the overall, uh, thing you're looking for is which city is the most likely to succeed, right? So really, you just want to say, hey, you know, if you're going in your second market, you want to pick a market that you know is going to be successful because you don't get that many chances to have a second market. Um, and once you get to the third, fourth, and fifth market, then you start to think about other things. So, you know, in our third market, one of the big things we're trying to think about is, okay, there are lots of other food delivery companies. Should we go after a market that is underserved, Right, and prove that Sprig works anywhere Uh, even in a market that's maybe less so well known than say, you know, a Chicago, or do we go after the biggest possible market size? And I think those are questions that are very case by case and depend on how much capital you want to put into a market versus how much time you have and, and how many, what your other, what the other companies in the space are doing. It really depends on the situation.

AI assessment note: “depend on how much capital you want to put into a market versus how much time”