Rafael Ilishayev
Co-Founder and Co-CEO, Gopuff
The best leaders in the world, they’re deferring credit to the team. The team accomplished this, the team did that, the team really stepped in for the customer.
Summary
In this week’s episode of “Leadership Matters,” Alan is joined by an innovative entrepreneur who leads one of America’s most successful startups. Rafael Ilishayev is the co-founder and co-CEO of Gopuff, one of the largest on-demand delivery services in the world. Started less than a decade ago while Rafael was still an undergraduate, Gopuff is now worth $15 billion and operates in hundreds of cities around the globe. Along with his co-founder, Yakir Gola, Rafael has helped to create and define an entirely new category of business at just 29 years old.
In their conversation, Rafael and Alan cover a wide variety of topics, including the origins of the company, the key to his successful partnership with Yakir, and the values he wants reflected in Gopuff’s culture. In Rafael’s mind, entrepreneurship isn’t just about the individual. Success is built on networks of support and mentorship, and through his philanthropy, Rafael has sought to empower future generations of entrepreneurs by providing them with the networks they need to build great companies.
Mentions & Resources in this Episode
Guest Bio
Rafael Ilishayev founded Gopuff in 2013 with Yakir Gola, his Business 101 classmate at Drexel University in Philly. With a background in the restaurant and banquet hall industry and an entrepreneurial spirit, Rafael knew what it took to make the dream a reality. Rafael helped goPuff plant its roots in Philly & spread to more than 500 cities nationwide. Today, customers can get everyday essentials like drinks (including alcohol in select markets), over the counter medicines, snacks and more delivered right to their door with Gopuff.
Clips from This Episode
On the way his family upbringing shaped his values and work ethic
On the culture of his company and the values he looks for in new hires
Episode Transcription
Alan Fleischmann
My guest today leads one of America's most successful start ups at just 28 years old. Raf — or Rafael — Ilishayev is a co-founder and co-CEO of Gopuff, one of the largest on-demand delivery services in the world. Started less than a decade ago, when Raf and his partner Yakir Gola, were still undergraduates, Gopuff is now worth 15 billion dollars and delivers everything from alcohol to diapers, to locations around the globe in under half an hour. Both Yakir and Rafael, or Yak and Raf, are sons of immigrant parents and in many ways, are testament to the American Dream. They have appeared on Forbes 30 Under 30 List and have already made a name for themselves as significant philanthropists in Philadelphia and beyond.
I'm really looking forward to today's discussion, because it's a rare opportunity to hear from one of the most stand out members of this new generation of leaders, those who are shaping our world, for many decades to come. Raf, it is such a pleasure to have you. I've already seen some of the great impact you've had on technology and business. I know from our conversations that you and I have had, how important community is to you as well. While this may be the early chapters of your long story, it's certainly been a significant one and we're really happy to have you on Leadership Matters. So welcome.
Rafael Ilishayev
Alan, thank you. Thank you so much for having me. I think the only thing that I'll correct from your amazing intro, is that I just turned 29, so.
Alan Fleischmann
I was going to ask you, my first question is, am I right that you're 28? First of all, to me there's not a big difference between 28 and 29 to me. But to be accurate, I will correct that. You are 29. That's amazing, frankly, that you have built what you've been building. What was the year that you founded the company? In 2013?
Rafael Ilishayev
Yeah, we founded the company in 2013.
Alan Fleischmann
Yeah, so considering that, you grew up with this company that you founded, in many ways. So it's amazing.
Rafael Ilishayev
Oh man. It was my entire college experience and then all my, the entirety of my 20s, right obviously, focused just on the growth of this company.
Alan Fleischmann
Well tell us a little about that here. We've got a wonderful listenership here, that are investors, inventors, CEOs, aspiring CEOs, leaders and people who just want to be around and learn from people who are doing good things. You're doing amazing things. You were at Drexel University and you guys were buddies, you and Yak. You created it early in your time at Drexel, right?
Rafael Ilishayev
Yeah, so I'll give you a little bit of the founding story. Yakir and I were best friends before we started Gopuff. Yakir was kind of Gopuff 1.0, right? "Yakir, can we get drinks? Yakir, can we get snacks?" He was the only friend out of our friend group that had a car. We realized that this is a big problem, not just for us, but for a lot of students, right? It's no secret Gopuff started as us being college students, for college students.
We said, "We want to fix this problem, but we want to fix this problem right." We want to own the entire inventory experience. We're not going to build this on top of a third-party system with kind of shitty inventory controls and shitty customer experience controls. But really, focus on building the right kind of company. A company that's, one, has profitable roots and then two, can scale right for the customer.
So we did something in 2013 that people thought we were pretty insane for. We said, "We're going to own inventory. We're going to own micro-fulfillment centers." People didn't think that it really works, but we kind of proved in the beginning, that this is the only model in delivery, that's going to make any kind of money, right? For the first three years, we actually didn't raise any money. We were profitable from day one and kind of just stayed really under the radar. Opened up five U.S. metros. Raised our first dollars that's really when we started pivoting the business, right? We went from this young person's delivery app, to a category we call instant needs.
So anything that you need from an immediate, every day basis, we could deliver it to you at an affordable price and still make really, really strong contribution margin, right? So we got into the pet category, the baby category, over-the-counter medication, household, ice cream, alcohol. We start getting into more and more categories that our consumers loved. As a by-product of that, the demographic kind of dramatically changed, right? College students still an important part of our user base. But we know kind of really focused on kind of the broader instant needs market and really delivering kind of all of the use cases that people need in their immediate every day lives.
Alan Fleischmann
Well I tell you, I know that from a good friend of our family, who I didn't know, they were a demographic I would not have thought would have been using Gopuff, who told me proudly what she orders on Amazon Prime and what she orders through Gopuff, In the same conversation, in which she was like, "You know what? There are just some things you don't want to wait and you can't wait, I go Gopuff. I'm not going to get in a car and drive somewhere in the middle of the night, or go late at night." So it's actually, that urgency, that immediacy is really what the DNA of this, that makes you guys so special, right? Then you build warehouses, right? I mean it's not just you're delivering, you actually are, you're building the products. You're actually building the inventory.
Rafael Ilishayev
Yeah and listen, the easy way is not always the right way, right? Everyone was telling us to go third-party, early. While that would have been a much easier way to scale, it wasn't the right way to scale. It wasn't the right way to one, scale for our customers, because we couldn't control, you can't control the inventory and supply chain part of your business, right, which is I think one of the secret sauces of why Gopuff works so well.
It's really, really tough to deliver, one, a spectacular experience for the customer and then two, drive really, really profitable orders, right and nine years in, right, we're finishing up our 9th year and going to go into our 10th year, we're now driving more contribution margin per order than we've ever had, right? We're just shy of five bucks on a consolidated basis, on a contribution margin per order.
That number's only going to continue to grow, as we continue to kind of expand and deliver for our customers. So it wasn't the most obvious model. It wasn't the easiest model, but it was the right model to build for our customers and then ultimately to deliver a really profitable experience.
Alan Fleischmann
That's great and how many products are there now?
Rafael Ilishayev
There are a total of 30,000 products. But in MFC, there's roughly 4,500 products. So each micro-fulfillment center has a unique assortment, right, that's catered to the demographic of that city. So there's roughly 70-75% overlap on kind of MFC by MFC, but we really scaled kind of to be like a great local player, right? We're a global player, but we're a very local player, as well too, right?
We want to really cater to the customer in that neighborhood and really make sure that we have those products. So you can get kind of anything from a COVID test, to beauty products. Now we just launched fresh food, right? So with a new brand called Mean Tomato, we're delivering pizza and freshly made items from our Gopuff kitchens. So really expanded beyond what the original use case was. But really, really focused on that local consumer, as well.
Alan Fleischmann
That's awesome. That's great. Then, when you started, am I right, the story that before you had that original investor of money, you actually flipped office furniture? Tell me a little bit about that story. That was an amazing story when I heard that.
Rafael Ilishayev
Yeah. It kind of seems like a long time ago, but we remember it really, really well. We were starting the business. We needed money to pay for an app development and we needed money to open up our first MFC. I had no cash flow before store one. We were just thinking about creative ways on how we can have our seed round, without raising a seed round. One of our buddies was talking about a company that was moving locations from a Philadelphia suburb, to center-city Philly and they were throwing away all of their office furniture. We thought about it as an opportunity for two things. One, right, it's great to have office furniture in your first office, right?
So that's how we furnished our first MFC and our small office that was in there. Two, we can sell all this stuff, right? So we got everything together. Yak had a lot of experience on selling things on Ebay, right, because at the time, he had an online jewelry store and he was selling a lot of the jewelry on Ebay. We got all that furniture, all those cubicles and we sold them on Ebay over the course of a couple of months and that's what really gave us enough money to start the business. I'm taking you way back, right? This is early 2013.
Alan Fleischmann
That's amazing though. It's extremely creative. It's very clever. I'm just curious also, when you talk about home delivery, how much growth occurred during the pandemic? I mean talk about a major disruption. But I guess at a disturbing one, obviously every level, but a real opportunity for Gopuff, I imagine, where you're already growing. You were already getting investors. You were already kind of proving yourself. But, I imagine the past two years in particular, it became very clear to the consumer and to the investor that you actually are delivering something that actually is essential.
Rafael Ilishayev
Yeah, kind of the years leading up to the pandemic, we saw some pretty amazing growth, right? We never had a year where we were growing under triple digits, year over year. But the pandemic, especially the first couple of months of the pandemic, was like two year's worth of marketing shot in 45 days, or 60 days, right? I think it was probably one of the hardest moments of my life, right? Think back, 2013, 2014. I was living in the warehouse, right, that was literally my home.
That was tough, but dealing with the supply chain issues and the demand issues and really making sure that we were there for our customers. We didn't shut down for one day, right? Making sure we were there for our customers, day in and day out, during the pandemic. I mean it was massively difficult, right? We were kind of back to these 18-19 hour days, seven days a week, kind of going above and beyond. We saw some pretty permanent changes in consumer trends, right? People went from like, "Hey delivery is something that's a convenience to me", to, "Delivery is something that I need in my day-to-day life."
We saw a lot of those trends kind of continue to manifest themselves in now the two years since the pandemic has started. So we always knew that this was going to be a massive opportunity. The pandemic accelerated some of those consumer trends a lot faster. But we saw some pretty massive growth, again, leading up to the pandemic. But we certainly, with our team, kind of came up to the podium and made sure that we were delivering for our customers day in and day out. I think kind of looking back now, it's probably one of the hardest moments of my life, right, kind of those first couple of months when COVID was really just getting started.
Alan Fleischmann
Did you have to create a whole new playbook, or the demand was so great too, that you needed to have the supply ready. I mean it was both an accelerant, I imagine, but also a whole new playbook getting created.
Rafael Ilishayev
Yeah and the crazy thing is — I'm not going to take credit for this, this was Yakir — he called this in January, right? So we really think about the world shutting off, it shut off in March. Yakir said the world was going to shut off in January, when we were just starting to really understand and he's like, "Hey, this is going to be worse than we can ever imagine." Everyone was like, kind of nonchalant about it back then. So he called it. So we did a little bit more. We got a head start to be able to plan a little bit better. But no one kind of thought it was going to be what it actually turned out to be.
So it was a really tough moment for us, our employees, our teams, in the field. But we spent a lot of time to really make sure that the consumer really got an amazing experience and everyone was really safe, right? So you were serving two masters here. It's like how do you make sure that the engine keeps running and how do you make sure the engine keeps running safely?
Alan Fleischmann
Yeah, that's amazing. Then, did you like know that during that period, did you know that you were going through this major transformation? Obviously, you didn't know how long it would last and did that also create more competition? Because I think of Gopuff as being a real category maker. I still do. I mean I think you kind of envisioned something that no one saw and you've been building it, you and Yakir, since. But have others jumped in? Has the competition gotten greater, because others want to be like Gopuff?
Rafael Ilishayev
Yeah, yeah. So I think nine years ago, when we wanted to create this 1P model. We created this instant needs category. People thought that was not the right model to win. Nine years later, clearly that's changed, right? There's players all over the world that are saying, "We're the Gopuff of this country, or we're the Gopuff of that country." While it's flattering to see, it's amazing to see kind of what we built and how it manifests all over the world, Alan, I'll tell you this is a really, really tough business. It's a really tough business to make it work. It's why we stayed quiet for so many years, right?
Before 2019, there were no articles written about us and no PR strategy. We were just really under the radar. Just executing and working and it took so many years of getting it wrong, before we got it right. Right, building all the supply chain infrastructure. I can't even tell you how much software was created for this business to run all these buildings, to run the driving platform, to run the routing, binning and batching. Not to mention obviously the consumer app, right, to make sure everything works and is seamless for the customer. But it took a lot of years and building and optimizing on the technology side, to make the engine run and I think what a lot of people think when they're entering this business, it's just, "We're going to open a whole bunch of buildings and this is going to work."
Players that approach it and do it that way, will find themselves kind of smacked to reality, very, very quickly, on not being able to, one, deliver a great experience to their customer and two, to be able to do it profitably. So we spent a lot of time-
Alan Fleischmann
All that investing, all that investing that you've done. All that research that you've done. All that community inter-coordination you've done, is necessary.
Rafael Ilishayev
Yep. Yeah, we spend a lot of time heads down, optimizing, not marketing. I'll give an example, right. We didn't enter New York til last year, right? It's one of the largest opportunities, but we really wanted to make sure that when we enter New York, right and ultimately we went to London and Paris and got that global presence, we wanted to make sure that we did it right. The approach of everyone else is, "We're going to enter New York first." That's when I know that they're really not focused on building the right kind of business and building a business profitably.
So we really, really make sure that we nail the business model. Really nail the business model and then scale. If you scale before you nail, it's just a recipe for disaster and I think there's going to be a massive amount of consolidation in this space, Alan and even more players that just won't exist. I think at the end, there are some really good players and there's some folks that are building the right kind of business. The vast majority, I think won't exist, unfortunately.
Alan Fleischmann
How many cities are you in now? I mean you're growing so quickly, now you're global. I didn't realize you were in New York already. So that's important. I remember talking to you at one point where you were like, "We're going to get this down right, before we're going to tackle New York." So what cities are you in, in the U.S. and where are you at globally? I know Europe's a big place.
Rafael Ilishayev
Globally, we're 1200 cities.
Alan Fleischmann
Wow.
Rafael Ilishayev
Across the globe. We are in the UK. We're in France, we're in Spain and we're in the U.S. We are able to become a global business, because of the focus that we kind of made domestically, right? We really focused on the markets and really understanding how you build the right kind of business. I can't stress this enough. If you just keep opening and opening and opening, without having accountability to yourself on, "Hey, we're going to build the right kind of business. We're really going to make sure that we build a business that drives really great consumer retention, really get consumer experience and profitability", then you're in trouble.
So before we even think about ourselves as this massive global player, it all started with really, really getting it right and then scaling it. As a by-product, I think we've been rewarded, right, then having the opportunity to serve so many customers in so many cities. But it started with really like, the devil's in the details, right? Really getting it right, really getting it right on the unit level and then scaling it to now become a global platform.
Alan Fleischmann
It's amazing. Well let's talk a little bit about the early life and your inspiration. Because, I got to say, for those who work in radio right now, but I hope you can hear your enthusiasm, because watching you, I'm doing this with you on video, you're an amazing, extremely passionate, inspiring individual. I've had other conversations with you that always leave me with your energy, it just shines through. Where did that come from? Let's talk a little bit about your family background. Obviously, a little bit about Yakir as well. You both come from immigrant families. So do I. What is that brought your family to the United States and then is it as I described in the introduction to you, that kind of American Dream story of the immigrant success story? Then tell us a little bit about who your mentors were along the way.
Rafael Ilishayev
Yeah. I owe everything that I have to my parents and grandparents. Everything. Even before I get to that, Yakir and I are both first-generation Americans and we're best friends, but we're kind of different people, right? Yakir is the most extroverted introvert you'll ever meet and I was much more extroverted, nine years ago, when we started this. I've become more introverted because of Yakir. We got a blend between the two. But because of our upbringing and because of our parents. Our parents are best friends. We're best friends.
I'd be really hard-pressed to find two other humans in the world that have almost identical values, right? We have like 99.9% overlap. I haven't met another human that has something like that. It's because of our ultimate upbringing, right? Our parents came from Soviet Russia. They were escaping communism. Moved here when I was two years old. I worked with my parents kind of ever since I can remember. Both my parents were entrepreneurs. One of them was in the restaurant business. My mom had medical supplies and pharmacies. Kind of did every job under the sun, to get there and build it. I saw the true meaning of whatever it takes, get the job done, work extremely hard hours and get rewarded as a by-product.
I owe everything I have, my entire work ethic, every leadership lesson that I've learned and I've gotten a lot of great coaches along the way, that helped kind of sharpen some of those tools for us and really, really make sure that we became better CEOs. But the entire foundation was built on our parents. Our parents gave us all those tools, really, really early on and as a by-product, Yakir and I really started complimenting each other and becoming kind of true partners, not just best friends. We are each other's biggest fans and critics, right? It's how we really make this really work and really scale and I don't want to undermine the opportunity. We also had so many coaches along the way, that we still have today, that really shaped us and molded us to be better. We learned from a lot of people's successes.
We learned even more from those people's failures and said, "How do we avoid some of the landmines that people stepped on, to again be really better CEOs?" We learn every day, right? We want to better ourselves every single day, but our base is what we're really focused on. Frankly, today my life, as I think about the next step of my life and having children and everything, I'm thinking, "How do I replicate so many of my early experiences in my childhood, in my future children and really make sure that they have that same work ethic on a kind of going forward basis?" But I owe everything that I have to my parents and my grandparents, for kind of instilling to me. If Yakir was here today, he would echo that, but I think 10 times fold too.
Alan Fleischmann
Yeah, do you have any brothers or sisters?
Rafael Ilishayev
I'm an only child. Yakir is one of three. I'm one of one. My mom jokes all the time, she's like, "I saw you. I didn't want to make any more." I mean it's really, really great. Again, the kind of character that they instilled in us and really the same kind of character and kind of work ethic that Yakir's parents instill in Yakir.
Alan Fleischmann
Because of the fact that both of your parents are entrepreneurs in both of your cases, did you just at a young age imagine yourself, "I'm going to start a business." Didn't know what the business was, but, "I want to be an entrepreneur, I want to start a business." Or was it, "I'm going to", what was your dream? How many dreams did you have?
Rafael Ilishayev
Oh man, we were kind of doing it all as a kid, right? I didn't have a chance to start my own business, because I was always with my parents, working with my parents. Yakir too. Yakir digitally transformed his dad's business, kind of early on. He was like 16 years old. He built an online jewelry store from his dad's offline business and by the time he was 18, he was already generating a couple of million dollars in revenue, right? Then, he was in high school, right, he was in 12th grade and he was working with his dad and like really transformed his business and accelerated his business in a really big way, by just creating an online jewelry store, really marketing and supporting it with zero experience. Just kind of learning along the way. So I think we always knew that this is what we wanted to be, but earlier on in our lives, it was all about supporting our parents and learning from them, so then I think we would have a chance to do it ourselves, as well.
Alan Fleischmann
How did you two meet in Drexel?
Rafael Ilishayev
First day we were there, we saw each other. I think the story that we said is, we met in Business 101 class. We did. That was the second day. The first day we just saw each other at, there's this area in Drexel called Race Lawn. We were just sitting across from each other. But I had some friends from home, he had some friends from home. We just started talking and we instantly became friends. We realized how much we had in common and instantly became friends.
Alan Fleischmann
That's so cool. You're listening to “Leadership Matters.” I'm your host Alan Fleischmann, with a very special co-founder and CEO of Gopuff, Rafael Ilishayev and we're discussing his journey and the journey of his co-founder, Yakir and what they're really accomplishing not only in the United States, but globally with what is one of the most innovative start ups in the last decade, at 29 years old and still going strong, which is really amazing. Talking a little bit about when you started this business, the two of you met, you talked a little bit about it before. Did Drexel make a difference at all, or did it just happen to be where you two meet? Or was there something at Drexel that also made it special? Or is it just being in the right place at the right time, with the two of you coming together?
Rafael Ilishayev
Yeah, I think Drexel for sure played a role. I think anywhere Yakir and I would have met, magic almost instantly happened. But Drexel definitely played a role. Drexel kind of was fostering entrepreneurship in its DNA and really focused. Their co-op program and their entrepreneurial school that they opened up, really kind of fostered an environment of entrepreneurship. That was kind of instilled in Yakir and I way earlier, right? Like by the time we were in college, always thinking about How you're going to make money? How are you going to make a buck? What are you going to sell? How do you progress yourself? So like all of that was kind of instilled in us earlier. Drexel for sure played a role, but the real magic happened when we kind of got together and started thinking about how we were going to do this thing.
Alan Fleischmann
What is the magic between you, because friction often occurs between two co-founders and people grow differently. But as your company has scaled and profoundly scaled, it seems like you and your co-founder are getting closer. I mean the way you talk about him is so extraordinary and I know the feelings are mutual when he talks about you. What is your secret to that? I mean it's almost like a marriage. I mean, if you're talking right now to other co-founders who are emerging and scaling, what advice would you give them? Obviously, you trust each other and obviously there's great chemistry, but I bet you work at it too.
Rafael Ilishayev
For sure. I think a lot of times with co-founders, you get like a business co-founder and a technical co-founder. Yakir and I are both business guys. I think when the co-CEO model doesn't work, it's not because it doesn't work for the company, because the two co-CEOs aren't really aligned, not from a personality basis, but from a values basis, right? I talked about this earlier, right? Our alignment on a values basis, I don't brag or talk about anything, this is something that I'll definitely brag about. It's very, very hard. I haven't seen two humans, as aligned from a values basis, as Yakir and I.
I'm really, really proud of that. I'm really proud and I'm really fortunate that I found someone like that in my life, to compliment me so well and me compliment him so well. But I talked about this earlier. We're each other's biggest fans and critics. We very, very rarely argue. This is coming from a person that argues a lot. I argue and push and kind of learn from everything, but because Yakir and I see the world in such a similar way, it's really, really rare that we argue with each other, because we know that an outcome of what we want, is almost identical.
So for us, I think it's the value alignment first and for anyone else that's thinking about the co-CEO model is like, "Do you see the world in an identical way as this other human, right? Are you guys aligned from your own personal values perspective, almost to an exact T?" If both of those things are, or one of those things falls, or both of those things falls, it's not going to work. It just is a recipe for disaster. The goal for us is to build a generational business, Alan. I feel extremely fortunate to lead a company of 15,000 employees, right and so many more driver partners. But it all started with just Yakir and I, living in a warehouse with a dream of building this thing. If that wasn't aligned. If we weren't aligned in those early days, none of these things would have been possible.
Alan Fleischmann
Then also, are there certain things you do to guarantee, you live near each other, which helps a lot. But are there certain things that you do as rituals, that guarantee that you're going to be together alone, communicate, catch up with one another?
Rafael Ilishayev
Yeah, like no matter what, at the end of the day — when I say the end of our day, it's like 1 a.m. or 1:30 — my fiance knows that's our time for Yakir and I, no matter what, to talk. Right, so we're talking a lot throughout the day, problem-solving, meetings, the whole nine yards. But we have like 30 minutes, at the end of the day, no matter what, to talk about anything. Right, anything that was in our mind, anything that happened during that day, or just in general, just to catch up. Because a lot of the in the day conversations are so tactical, so detail-oriented, so much like, "Let's problem solve this issue." That's the whatever it takes to do it and know that our families keep Shabbat.
So on a Friday into Saturday, Yakir and I are with each other all day, or our families are together. We're with each other for 25 hours and that's our time to decompress, but also talk about anything that was missed during the week and kind of decompress. But the family values are kind of hugely important to us and it's a way for us to really even connect on a familial basis, as well.
Alan Fleischmann
That's amazing. I mean I always tell people that I think meditating works and if you can take a Sabbath for 24 hours, you're going to be more productive for the next six days that follow. It sounds like you obviously do it for religious reasons, as well. But you're actually doing it together. You're actually spending the Sabbath together. It's pretty amazing. You would have all the reason in the world not to and you chose to. You don't talk about work.
Rafael Ilishayev
No, no. We don't. We're just connecting, right? Because all week, all we're talking about is work, right? This is a chance to really have that kind of relationship and with our families as well, right? It's not just Yakir and I. We have massive family. I have like 41 first cousins, right? So all the time, there's family over and that's kind of our, people talk about work/life balance. That's our harmony, right? Balance kind of implies everything needs to be 50/50. But many times, when you're running a business, it's never 50/50, right? It's 90/10, 95/5, 85/15, where every week is kind of different. But that's how we make the harmony work, from our perspective.
Alan Fleischmann
Does it make Sunday a working day?
Rafael Ilishayev
Yeah, I mean every day used to be a working day, up until we started doing this Shabbat thing like a year and a half ago, two years ago.
Alan Fleischmann
Oh wow.
Rafael Ilishayev
To your point, I mean we always had dinner on Friday, with our families. But really doing it for a full day is something that we started doing fairly recently and it's been a massive, successful experiment for us. You talk about being more productive during the week, for us, it's been a massive efficiency lift.
Alan Fleischmann
Did you spend a lot of time trying to figure out the best way to spend the Sabbath? Was it a long time coming and you had to spend time researching it, or what made it happen a year and a half ago?
Rafael Ilishayev
Yeah, I think it started because of our family. Our family wasn't really doing it. We were like, just it happened organically, right? It's something my dad was kind of giving me little nudges, like, "You're working, you're sleeping three, four hours a night, every day, seven days a week. You're going to run yourself into the ground and you've been doing it year in and year out." He's like, "Just try it." It kind of just happened organically and again, everyone's situation is different and everyone's plug off is different.
For us, this worked phenomenally well and it made us a lot more productive during the week and it gave us a chance, the little things. It gave us a chance to sleep, eight, nine, 10 hours, instead of a typical three, four hours for us. So little things that you take for granted sometimes and then when you kind of get it back, it's really, really special.
Alan Fleischmann
Do you say no to things then when people say, "Can we talk on Saturday? I want to talk to you on Saturday?" You just say, "No, I can't do it."
Rafael Ilishayev
That was the hardest part for me. That was the hardest, because I'm a control freak, right? Like I think most CEOs are naturally paranoid, naturally controlling and it's something that was much harder for me. But we're managing. I work with really, really good people, with a really great team.
Alan Fleischmann
That was my next question. It means you have to have a great team that know that the two of you, because both of you, two of you are going to step offline Friday night and you're not back til Saturday night, which means that if a crisis occurs and there's always something, you've got a great team that can just jump right in.
Rafael Ilishayev
Yeah, we spend a lot of time on hiring, in general. I mean up until approaching two years, right, right after the pandemic, maybe the summer 2020, up until that moment, Yakir and I were still interviewing everybody. Every single person that joined the company. We now do, I mean hiring is wildly important to us and maintaining the company culture is wildly important to us. It's one of the things that Yakir and I are really top of mind for us, how do we get back to that, right? It's a massive undertaking. It doesn't mean like every single person, but getting one or two more layers don on having and it's not because we don't trust folks, but we really want to make sure that people are understanding our DNA, on a founder level.
Even recently right, we hired this guy Brian Batista, who runs our European business. He's the number two guy at Booking.com. Phenomenal talent. Even better person. Two weeks ago, we announced the hiring of Maria Renz. She runs our North America business now. All of marketing, merchandise and brand, everything reporting up to her. Former Amazon executive, reported directly into Bezos. His technical adviser as well, more recently running SoFi and we've attracted really, really good talent, because Yakir and I made an emphasis on attracting really good talent and made sure that that was a disproportionate kind of portion of our time.
Alan Fleischmann
Let's talk a little bit about the DNA of your culture, the culture that you really aspire to have at Gopuff. How would you define it?
Rafael Ilishayev
Before I answer that question, I'm going to answer, I've learned over the last near decade, that I'm not a black and white person. Almost everything in my life is in the gray. But this is pretty black and white for me, is that people fall into two natural categories. People that are naturally inclined to be arrogant and people that are naturally inclined to not be arrogant. To be humble. Just like there's very little balance in life, right, this is not a balanced thing. It's not a 50/50 thing in the world, right? It's like a 75/25. Unfortunately, leaning to the arrogant side over the humble side. That's kind of like a show-stopper for us, right?
So when we're interviewing people the first thing that I'm looking for, is if someone is naturally inclined to be arrogant, or is someone naturally inclined to be humble? That humble trait is almost always linked to a trust factor in a person's personality. So Simon Sinek has a whole thing about this, about kind of mid-performers and high trust, right? I kind of live in that same world. I saw that years later, where our very, very basic concept is, is someone a team-oriented super athlete, right? The super athlete trait is kind of table stakes. But it's a 49/51 split between super athlete and being team-oriented, right?
Because, if you're not making everyone around you the best version of themselves. If you're not making others run faster, you're just not going to move the needle far enough. So ultimately for us, right, and that's how we created all of our values, was under these concepts of natural inclination to be humble, being a team-oriented super athlete. That was all the foundations that led to creating our core values, which contradict one another, right? You have a core value of getting everything done and moving further.
You have a core value of sit down and be humble and work together, right? They naturally contradict one another, right, because one of them is be the best version of yourself and the other one is, make others great. The people that can do both, are the most special. So that's what we're looking for in a human and that's how we created our value. I mean the values of the company were ultimately built on mine and Yakir's values, right? For better and for worse, right? It's kind of it is what it is. So we're looking for that first trait in a human. Is someone naturally inclined to be humble. Then, are they a team-oriented super athlete and then we're measuring against all the rest of the core values.
Alan Fleischmann
How do you find them when you're interviewing that person?
Rafael Ilishayev
So a lot of our great people, bring great people, right? It's one of the measures that we look at executives for. It's like, you hire a leadership team where one layer down, if a person's not bringing other great people along with them, it's usually a yellow flag. So sometimes a red flag on that person and their ability to kind of, not just attract the right talent, but be the right kind of person that we're looking for. So our best people have come from our best people, right?
We obviously have great recruiters that we're looking for and that really understand what we're looking for and Yakir and I disproportionally say no, right? We'll say no so many, like the whole team will be yes and we'll piss people off sometimes and we'll see something that we don't like in that person, from usually an arrogance perspective and we'll say, "This doesn't make sense for us. This is not the kind of", no matter how badly we need that human, right? So we really, really disproportionately look for that and then as a counter-balance, really make sure that we hire the right team for us.
Alan Fleischmann
Are there certain exercises you go through when you're, I mean there's obviously the hiring part, where you're actually interviewing people to find out whether they have a certain amount of confidence and experience and expertise or instinct, but you don't want that arrogance. You want to show, you want people to come with that humility. It's hard to find in the interview. I mean interviews are often people will tell you what you want to hear and perform well. How do you actually ask the questions that will let you know that they're not a team player, or that there is an arrogance that would kind of be a red flag for you?
Rafael Ilishayev
So a couple things, and you're not going to get it right 100% of the time. Some people slip through the cracks and you find that out in the first couple of weeks as well, right? Before COVID, we had every single person come and work in a micro-fulfillment center before they started, to really understand the consumer experience. There's a direct correlation with people that have a problem with doing that and an arrogance trait. That's just one example, that we found over the years is like a person that's like, "Why do I need to do that? Why do I need to go work with the field employees?" That's almost always a red flag for us.
Again, every business is different, on understanding a person. But you learn certain questions over the years, to really focus on, on how people work with others. The way they talk about the people that reported to them and the people that they reported in to, that you really test for and again, you're not going to get it right 100% of the time, but you look for these yellow flags and if you find enough yellow flags, then it's a red flag, that you know this is not the right person for you. Again, I want to preface this by, it doesn't mean that, they're not a bad person, they're just not the right person for the kind of company that we're trying to build.
Alan Fleischmann
So tell us a little bit about the traits of people that have the right characteristics for Gopuff.
Rafael Ilishayev
You know they're always focused on the team, not themselves. So they're always focused on, "How do I build a better team? How do I empower others to be better?" They never take credit, or very rarely take credit, right? A lot of them, you see the best leaders in the world, they're deferring credit to the team, right? The team accomplished this. The team did this. The team really stepped in for the customer. They're really focused on, "What's best for our customer?" Not what's best for themselves, right? We think about it, there's a separate decision-making framework that we think about and this confident customer company team individual.
If you think about basic human nature is a direct opposite of that, right? I'm the most important people in the room, than the people in the building and the folks that keep the lights on. They're important, but they're not that important. I don't see them every day. So that individual to customer mentality, which is basic human decision-making framework, is the opposite of what we're looking for. So we're looking for an anomaly on someone that's putting the customer first, the company second, the team third and they're dead last, right? In almost every single decision that they make, as a by-product of that, will be right. Or their batting average will be 85%, 90%, 95%, where people talk about fail fast and learn and iterate, right? If your batting average is 30%, it doesn't matter if you're failing fast or getting it wrong, so much more than you're getting it right.
But the key to getting it right, more than you're getting it wrong, is to start with that decision-making framework, right? Is the person thinking about the world in that way and then as a by-product of that, Alan, I don't know how else to say. Magic happens, right? All of a sudden, you can out-execute everyone, you can move faster than anyone else and you have a team that's built and really, really resilient to make sure that no matter kind of what the markets hit and no matter kind of what the sentiment is, they're really pushing forward for the customer in a really meaningful way.
Alan Fleischmann
What books have you read, or role models have you seen out in public, that have become real influences in your life?
Rafael Ilishayev
Yeah, I have a favorite book, Eric Schmidt co-authored it. It's called Trillion Dollar Coach. Bill Campbell was the coach of so many of my coaches. I read that book because, so many people that I find inspiration from and so many people that I've learned from, have learned from him. It's a great tale of how a single person can influence such a massive part of today's generational leaders and really shape this idea of coaching people to success, moving people forward, identifying kind of hiring mistakes and traits in people that could be toxic and really pushing kind of a business forward in a really, really meaningful way.
Although, I didn't get to meet Bill. He passed away kind of before I had a chance to meet him. So many people that coach us, that he's coached and kind of his legacy lives on through that. So it's really, really amazing. I love that book, because of the personal attachment I have to the people that have really pushed us forward.
Alan Fleischmann
That's great. I knew him, not super well, but I got the chance to work with him on a few occasions. What struck me and has always struck me and I've talked about this on the show, is how many people who really got to work with him admired him and still do. His legacy and that book was a beautiful, beautiful devoted book to his legacy and what his great impact, which was amazing. But I'm curious, because you obviously, it's hard to be a category maker, which I would argue you are and at the same time, have role models, for other people who are out there.
So it's really about other people who are maverick folks, who are willing to kind of go with their gut and be original. It's hard to be original. It's easier to be like everybody else. You guys don't have that luxury with what you're building, but you still seem to maintain a certain culture and a certain quality, when it comes to community. I know that another part of you is very philanthropic and you're very focused on, as you continue to scale, to play a more philanthropic role in the world. Tell us a little bit about that too, because you are very focused on community, in a way that frankly, it doesn't matter, I mean Philadelphia or Miami specifically, but you're very focused on community, in general.
Rafael Ilishayev
Yeah, yeah. I think what Yakir and I are really, really passionate for, is the next generation of entrepreneurs, right? I'll start with this and I'll get to the question directly. One of the things that we're insanely proud of. We had an early employee who started with us. He was our 19th employee. His name is Tony Oloko. Nigerian immigrant. Moved here, freaking really, really a superstar and came to us and said, "I want to start my own business and I want to push it forward." We're like, "Yep. I mean this is the time to do it." He's like, "I'll do it, if you guys kind of set me up as an early backer and you guys can really coach me kind of through the way too."
I mean today, he runs a 1.7 billion dollar business, right? A couple years later. It's something that we're insanely proud of, right? Everything that we think about from a philanthropic basis is how do we really push the next generation of entrepreneurs? So we created this program called, Put Me On, which kind of really brings together industry leaders, experts, to support entrepreneurs who are kind of historically under-represented and empower them to really grow their business. So we give them a chance to not just come on to the Gopuff platform and grow, but have access to kind of a network of industry-leading coaches and really push them forward, to kind of be successful.
The distribution of, on the Gopuff platform is obviously really, really massive for folks that are just starting a business for the first time. But we want them to build a nurture community, that's for entrepreneurs and again, like I said, for predominantly under-represented communities, to grow their business and to grow it on Gopuff and really beyond Gopuff. Working with local business as a whole, I mean outside of the Put Me On Program, has been a core tenant of ours since day one, right? I talked about it kind of earlier in the show, but 20-25% of our [inaudible 00:48:26] market, is local assortment and not only is it great to help kind of really build the local community, but it's good for our customers, because customers generally love products that are local to them.
So that's something that we really hold meaningful and we have kind of dedicated resources that just focus on that. Drexel holds a special place for us too. We donate a couple times to the Close School of Entrepreneurship. Set up scholarship grants and really made sure that we're part of Drexel's story and since the beginning of the pandemic, we've donated millions of dollars, actual dollars and products to a variety of causes, to really make sure that during the pandemic, when people were kind of going through one of the hardest points in their life, that we can help in whatever way we can help, whether it's through products or cash.
Alan Fleischmann
That's a big part of when I think of you, I think of you as being very passionate about helping others and then it kind of sounds like a little bit like your parents or you, how can you actually scale inspiration to send the message to people that there's an entrepreneur best in practices, or best thing to do.
Rafael Ilishayev
Like on the personal side, right, away from Gopuff, almost all of my philanthropic efforts go towards kids. Kids or young adults that are either hitting a rough patch in their life, or want to start a business, or God forbid, are sick and need help. All of our philanthropic efforts are surrounding that. Again, I wouldn't be who I am, without my parents. Kids don't have any control in the situation they're in, right? They're just kind of in the situation, because they're in that situation, or they were born into it.
So whatever way we can help and give, whether it's just a confidence boost to somebody, or help them through a rough patch in their life, like that's on a personal basis, what Yakir and I focus all of our philanthropic efforts on. It's why Gopuff made and continues to make sizable contributions to the Boys and Girls Club, right? Because we know why we are who we are and we want to give as much chance to as many kids as possible to have that opportunity, as well.
Alan Fleischmann
That's great. I know obviously, it's well known now that you're living in Miami. What made you move to Miami?
Rafael Ilishayev
I talk about COVID, early COVID, being one of the hardest moments of our lives, right? This non-stop effort. All of a sudden, we went from an office environment, where Yakir and I lived in the office, to everyone's at the home, 100% of the time. Our families started getting really, really lonely and Yakir and I were kind of glued to a screen all day, every day. We did it, kind of as much for ourselves as we did it for our family. We moved to Miami with our family. My parents still live with me. I'm now getting them a house next door. But for the last two years, we've been living all together, right, Yakir with his parents, me with my parents.
We moved because, this kind of depression and loneliness was starting to happen, with so many families and so many folks being isolated. I think on the personal part, right, when you have such a chaotic life and you're involved as much as you're involved, a little sunshine kind of goes a long way. So we saw that really early, on how it kind of changes mood and pushes people forward and made our families really happy. What we didn't see quite frankly and what we see now is, the massive tech hub that Miami's become, right? Three out of five of our board members have moved and live in Miami today.
So many people that I know from the start up community and founders that have moved to Miami and it's become a real tech hub. A lot of our engineering and product efforts and hiring come from Miami. Even though it wasn't around 18 months ago, it's now our 4th largest metro. So we have a sizable amount of employees now, in the city. I love Philly. Philly will always be home to me. Philly is the reason why we are who we are, right? We started in that city and it'll continue to be a massive part of the Gopuff story. But this is a move that we kind of made for our families and as a by-product of that, the way the world shaped up and became a massive tech hub and a huge catalyst for us, for the next generation of employees.
Alan Fleischmann
How much time do you spend traveling, now that things are opening up? Is it, can you do this from headquarters, if you will, where you are? Or it'll be on Zoom?
Rafael Ilishayev
I live on the road. I'm home two or three days of the week, if that. So I try to be home for Friday. That's almost always my goal. But other than that, I'm constantly on the road.
Alan Fleischmann
When people talk about Gopuff, talk about you guys, the two of you as co-founders, what is the question that no one's ever asked? Or the question that you wish people would ask more?
Rafael Ilishayev
It's not about a question that they don't ask, but a lot of people are focused, especially people that want to start a business, people come up to us and ask us for advice all the time. They're really focused on the right now. Kind of where we are right now, what are we doing right now and what we always focused on when we were talking about folks and we're getting our coaches is like, what were you going through of what we are right now? Like what mistakes would you not make kind of in year one and year two? So many people, they just want to leap frog to kind of year nine or year 10, not realizing there's a lot of in-between.
So it's not that nobody, but most people focus on the right now and kind of, "How do I get quick success?" Which frankly, just doesn't exist, right? It's a collection of a lot of hard work and perseverance. So focusing on how you build it, which is a lot of what this podcast has been, rather than kind of what's today, I think will show as a massive benefit for a lot of people.
Alan Fleischmann
Well give me a sense here too, give us a sense of like, when I'm looking out five years from now, or maybe when I go further, what do you want people to think of Gopuff, what is Gopuff of tomorrow different than what we would think of today and how are you getting there?
Rafael Ilishayev
Yeah, I kind of mentioned it earlier, Alan, right? We want to be a truly generational company, right? To be a generational company, a lot of things kind of need to fall into place, right? You need to have really great product. The customers need to love you. You need to have strong financial resources. We're just shy of 13 trillion dollars and growing, as we continue to expand to more and more categories.
So we're building a truly generational business here, right, where customers can use us for multiple use cases, not just the convenience use case, but use us when they need their medication delivered, right, an over-the-counter medication. Or maybe a number of household items, or fresh fruits and vegetables, right, which we're now getting into in a much bigger way. Or freshly cooked food, right, whether it's our Mean Tomato brand, or any of the other brands that we'll be launching in the future.
So really establishing all of those use cases and being the true leader in this instant needs category, right? We believe the future of commerce is instant, right? I don't think people are moving backwards, right? So if you think about the internet, right, or even before the internet, right, we started brick and mortar. Then there was a digital revolution. People got onto the internet, right? A few days ship, two day ship, one day ship. Two hours, right? It's getting more and more fast and we believe in every aspect, every industry, it's going to be instant, right? Whether it's the metaverse, or anything else.
So from our perspective, if the future is right and the future of commerce is instant, we want to be the generational company that really owns that space. We're really excited for what we're building, but we know there's lots of hard years ahead.
Alan Fleischmann
Yeah, it's amazing. I want to make sure that I am capturing everything that I can capture about you before we close the show. This is one of the shows where I wish we had two hours, not one. But I will say this though, as we do look to the last bit of the show, you are something very special. It's often when people say and especially in the world that you're interacting with and the venture capital world, where people always say, "There's founders and then there's CEOs." Very rare do I get to see as someone who studies CEOs and works with CEOs every day, someone who's a founder and a CEO and it's really remarkable that you're co-CEOs and that you really run this place together and you're envisioning together and you're realizing together.
Are there any questions, things, I said it before, but I want to say it again, that you'd want to leave, anything you'd want to leave with the listener right now, when they're thinking of you, or they're thinking of Yakir, or when they're thinking of Gopuff, remember this and follow this, because you are really a trailblazer and I want people to know what you're doing and to follow what you're doing.
Rafael Ilishayev
No, I mean Alan, I really, really appreciate that. I mean listen, nothing, as much as I talk about instant, no amount of success in this world is, right? We worked our butts off over the last couple of years, to kind of get to where we are today. Get to the massive customer base that we have. Millions and millions of customers. 15,000 employees. Tens of thousands of driver partners. But the reality, Alan, is we're just getting started, right? Where we are now and the way that we see the world, right, it's really just the tip of the iceberg for us. We believe the opportunity is massive and a lot of people say, gave us advice earlier, when we had an opportunity to sell the business and everything, like, "Why don't you guys just do it? You guys will have another opportunity to do so."
Not everyone in the world is like Elon Musk, right? You don't get, lightning doesn't always strike twice in the same spot. So I think this is our once in a lifetime opportunity to build something really, really generational and as a by-product of that, we're just getting started, right? We had nine hard years or work leading up to this and we'll have decades more to come and we're really excited by it. This is our entire life. This is what we dedicated everything to and we will continue to do that and press on the accelerator a bit more.
Alan Fleischmann
I love that and I will say this, that the journey has just begun and I'm sure it's going to be big and global and scaled and what's really great, is that at the very core kernel of what you do, is you're bringing good things to people who need it. So there is a purpose in what you do every day and I know the demand is high. Thank you for joining us today. I really have been wanting to have you on the show for a long time, to talk about your journey and to talk about where you're going and I look forward to having you back and look forward to staying on this journey with you. So glad you joined.
Rafael Ilishayev
Great. Alan, thank you so much.
Alan Fleischmann
Talk to you soon. Thanks so much.