Podcasts We Love: How I Built This, Instacart App

By Veselin Ganev Monday, May 1, 2017

How I built this NPR

Rarely does a podcast hit home in the way NPR’s “How I Built This” recently did. If you have an entrepreneurial spirit and only have time to only listen to one podcast, I would argue this is the one to choose. 

“How I Built This” is a weekly podcast on NPR that launched in 2016. It is hosted by Guy Raz, who is probably my all-time favorite radio-person (he is also the voice behind the mic on another of my favorite podcasts, the “TED Radio Hour.”

“How I Built This” is a podcast about some of the most popular brands and businesses in the world and how they came to be, as told in a beautiful manner by their creators. It has all the characteristics of great NPR podcasts: it is meticulously produced; its content is extremely well-polished; and if you are in any way, even remotely, interested in what it takes to create a popular product from a mere idea, you will soon find out that each episode is a small treasure.

‘How I Build This” discusses the triumphs and failures, the thought processes and the acquired insight in a tale told by the best person to tell it, the person who made it happen. Guests so far have included Kevin Systom and Mike Krieger (creators of Instagram); Joe Gebbia (Airbnb), Mark Cuban (serial entrepreneur) and L.A Reid (music producer and executive).

The most recent episode features Apoorva Mehta. Mr. Mehta is not a household name by any means; however, you will quickly learn that he is the person behind Instacart, a grocery delivery app aiming at fundamentally altering the way we get groceries. Instacart is currently valued at about 3 billion dollars. That’s right—billions, with a “B.”

Most entrepreneurs follow a similar model on their way to success. First they identify a problem, think of a possible solution, dedicate many long hours, hard work and enthusiasm to their product, and then hope for a little bit of luck for their startup to truly hit it big.

Mehta’s story is similar. He hated grocery stores—the parking lot, the lines—everything about it. He thought many people feel the same way and, as a programmer, he was sure there could be a technological solution to this problem.

Mehta is different from Mark Zuckerberg and Bill Gates in that he is not the typical wunderkind kind of guy. You know these guys—they drop out of Harvard, MIT or Stanford because they are too smart and too bored to stick around and waste their time.

Soon after Mehta earned his degree in Computer Science, he landed a job in Supply Chain for Amazon. In his own words, at the beginning he “enjoyed the job so much that he was wondering why they were paying him.” However, a couple years down the road, he discovered the job wasn’t as satisfying as it used to be, and that he would never be able to have any significant societal impact while working for such a big company.

Mehta thought it would be “cool” to become an entrepreneur, while also allowing him to make an actual difference in the world around him. He had no idea how to become one, so he started to go to tech meetups and discussions to try and pick up on the right mindset and required skills. Soon after, he decided he should launch a startup, without actually knowing what this startup would do. He moved to San Francisco, since everyone in tech appeared to be living and working there.

Mehta started exploring different ideas, writing code and analyzing business models to try and get to something that would work. Just as many other entrepreneurs before him, he had trouble nailing down a viable idea.

His first serious endeavor was a social network for lawyers; he raised about a million dollars to try and execute it. Soon after, Mehta realized there was a critical problem with his idea—he did not care about the business and abandoned it. As he says, “the odds of success in a startup are so low anyway, you have to put everything you have in it; otherwise it just won’t work.”

Apoorva Mehta learned the right lessons from his first (failed) venture, and he tried to find an idea he cared about and would dedicate himself to. Drawing from his own experiences, he realized how much he hated grocery shopping, and how grocery shopping has not changed at all, despite the fact that we now live in a world in which “we do everything online.”

The grain of this idea started growing and he started pondering how it could work, how it could differ from the few existing grocery delivery services.

He did not want to have to handle inventory, nor to compete with Amazon on prices, as he fully realized that would be an uphill battle. Instead, he opted for developing a tool for existing grocery stores to utilize, and therefore they could compete with Amazon by having their inventories listed within the app.

Thus the Instacart app was born. It utilizes personal grocery shoppers who execute the grocery list a user has made within the app. By happenstance, it turned out that people were happy that the personal shoppers called and asked them what to do if a desired product was out of stock or a produce item did not look great. This added to Instacart’s success.

Instacart initially launched by charging a small grocery shopping markup, plus a delivery fee. What Mr. Mehta realized is that if he partnered with the grocery store, he could negotiate pricing to the point where he could deliver groceries at the same price that customers bought them in the store and therefore just charge delivery fee.

Since the app worked as a proof of concept, outside money was needed to keep the idea running. Eventually Y Combinator agreed to invest in Instacart and the startup received the funding it needed in order to continue operating and growing.

While some people saw the potential in the service Instacart was providing, Mehta goes on to explain that finding people to invest in the company was a struggle, and something he had a hard time doing.

“We are still learning,” Mehta says in the last part of the podcast; he then goes on to describe what Instacart as a company does to maintain quality and be the best at what they do.

This episode of “How I Built This” is about 40 minutes long, and filled with worthwhile information about the struggles and serendipities of making something from scratch.

Listen to the entire episode here:

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