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Season 01 • Spotlight on AI
Season 02
Episode 013

Wonder’s Marc Lore on blending vision and execution

A conversation with the CEO & Founder of Wonder

Today, Marc Lore is synonymous with eCommerce. He is known for translating his bold visions into trailblazing companies like and As a serial entrepreneur, there are consistencies in Marc’s companies: they were born out of his own needs and focused on how we consume goods. But perhaps most notably – they are ideas so daring that some would call him crazy.  

His latest endeavor, Wonder, is no different. 

In this episode of Spotlight On, Marc joins Accel’s Sameer Gandhi to reflect on their long-standing partnership and Marc’s bold yet methodical approach to company growth. They unpack Marc’s vision for Wonder to become an AI-powered personal chef and, along the way, share lessons for new and seasoned founders on stage-by-stage growth, scaling a team, and building investor trust. The conversation offers an open look into Marc’s ambition and unshakable belief in the importance of founder naïveté when challenging new markets that nobody believed could be disrupted before.

Conversation highlights:

  • 00:00 – Recounting Marc’s and Sameer’s partnership over the years
  • 04:00 – Marc’s early interest in entrepreneurship and atypical first investor
  • 09:16 – Strategies for doubling the valuation of companies at each round 
  • 12:11 – Advice for new entrepreneurs on the power of naïveté
  • 14:43 – How transformed e-commerce by redefining customer expectations
  • 24:12 – Overview of Wonder and how it is redesigning the food supply chain
  • 30:59 - Marc’s rubric for growth and the necessity of capital burn
  • 35:10 – How Marc’s approach to interviewing and building a team has evolved
  • 45:50 – Marc’s reflection on how to gain an advantage in the early days of your career

Featured: Marc Lore, CEO of Wonder, and Sameer Gandhi, Partner at Accel

Learn more about Accel’s relationship with Marc Lore:

Explore more episodes from this season:

Access Spotlight On Season 1 episodes here.

Read More

Marc Lore (00:00):

I feel like now the training wheels are off. With all that experience, I'm able to go after the big one and I don't think, I never would've been in a position to do Wonder had I not had those experiences before.

Sameer Gandhi (00:09):

Welcome to Spotlight on, I'm Sameer Gandhi, and today I have Marc Lore, my good friend, Marc Lore, who is now on his beyond third company, but it's our third company together, which I am eternally grateful for you the opportunity to work with you and build these companies.

Marc Lore (00:27):

Yeah, it's been an incredible, almost couple of decades now.

Sameer Gandhi (00:32):

A couple of decades of us working on companies trying to change the world, so it's been really fun. Marc, I want to talk about that first visit when we came to New Jersey to diligence, which I think was right around the time of one of the big banks failing in 2008. It was really a rough time.

Marc Lore (00:53):

Yes, it was 2008, the Series C, 2008, and it was that global financial crisis, and you'd given us a term sheet before that and every day the stock market was down another like 500 points or whatever it was. It was insane.

Sameer Gandhi (01:07):

Yeah. I'm sure you were sweating it out in a big way, but I remember flying out there on a red eye and coming into the office and we had seen so many e-commerce companies and you realize that people talk a lot, but they didn't really have an intimate knowledge of the details and how they were going to solve certain problems. And I had a whole bunch of things I wanted to ask you, and I went through it, not in any particular order. I just wanted to see how you and Vin were going to answer those things. And for every single one, there was a really, you didn't consult anybody, you didn't have to ask anybody. You had it in your head and you gave me facts and figures and very detailed responses on the execution of the business. That meeting was really fun and amazing, but I want you to then tell me how you were feeling when the market was crashing and you're trying to do this e-commerce business that nobody thought made sense and you had to get financing.

Marc Lore (02:08):

Right. We were definitely worried, and I remember talking to you and we were like, hey, is everything okay? You're like, yeah, what do you mean? We signed the term sheet. We're going to do it. You were totally cool about it. And I remember Vinny and I were like, man, that's just Sameer and Accel. Those guys are really professional and we got a really good feeling. And that was really, it started the relationship is that you guys stuck by that term sheet even though others might've pulled it. So that felt great.

Sameer Gandhi (02:40):

Rarely do partners like us get to work on the third company together, and a lot of people would say, Hey, Marc's made two successful businesses. Does he want to go do something else? And every time you come back with the, I got the next thing, it's always bigger and grander and more ambitious and harder and he's just getting going. It's this drive comes back and you're like, it almost like the prior companies only wet your appetite for this entrepreneurial journey that you're on. 

Marc Lore (03:13):

Yeah. I feel like now the training wheels are off., Jet was just incredible learning experiences. And now I feel like with all that experience, I'm able to go after the big one and I don't think, I ever would've been in a position to do Wonder had I not had those experiences.

Sameer Gandhi (03:35):

Tell me what it was like when you, because I remember the Tops business, which you and I did not work on. This was before Diapers, but you had a banking job, you were doing well, you were sort of set in your career and then you just left to go start that company. Tell us about how you came to that conclusion that you were going to do that and walk away.

Marc Lore (03:59):

When I was a kid, I did every entrepreneurial thing you can think of, baseball cards, recycling, car washes, lawn mowing, newspaper. I've done all that stuff. I wanted to be, when I was four years old, I have this crayon thing that says, what do you want to be when you grow up the teacher road? And it says a farmer, and I'm growing plants and I brought it home to my grandmother and she said, why do you want to be a farmer doctor or lawyer? Come on, they're going to be the first one that's going to be a professional in the family. And I said, no, I want to be a farmer grandma because farmers grow stuff from nothing. And that was, as a kid, I love this idea that you put a seed in the granite and it grossed into something, but I didn't know at the time, but you're born, I think with this DNA of wanting to build and grow stuff for me as a kid, it manifested itself in this idea that I wanted to be a farmer.

(04:50): But looking back, it's totally true. That's what entrepreneurs do. They grow stuff from a seed, from nothing and they grow it and nurture it. And when I was in banking, because it's the only job I can get out of university, I didn't have any money, didn't know the startup world. I just got a job at Bankers Trust and I'm six and a half years into banking doing really well. I'm making a lot of money, and I just didn't feel fulfilled. I just had this longing to want to go build something and I'm like all or none. So I couldn't do something on the side. I was all into my banking job and one day I just woke up and I said, I'm going to be an entrepreneur. I don't know any other way to do it. I need to quit banking and become an entrepreneur. So I went into my boss's office and said, Hey, I want to let you know I'm going to quit. And he said, wait, what? You just had a baby? 

Sameer Gandhi (05:48):

I'm sure he thought you were completely crazy.

Marc Lore (05:49):

I just had a baby. And things were going really well. He was like, where are you going? What are you doing? I said, oh, I'm going to be an entrepreneur. And he said, wait, you don't just come in an office and say I'm quitting to become an entrepreneur, give up a half a million dollars a year with a baby. People don't do that. What's your big idea? Do you have funding? Do you have a salary? No, I assumed I got to raise money. I didn't know anything about it. I'm like, I assume I raise money and then I can maybe take a salary. He's like, you're freaking crazy. Literally like, you're crazy. He said, but I have a feeling like you're going to make something happen. So can I be your first 50,000? Oh, there you go. So he invested 50,000 and that was how it all started. The first business had no institutional money. It was 60 angel investors that cobbled together 5 million.

Sameer Gandhi (06:40):

And it didn't really work. And that was sort of .com boom and bust timeframe. And so you got swept up in all that and that didn't dissuade you from trying again.

Marc Lore (06:50):

It didn't.

Sameer Gandhi (06:51):

But you learned something from it.

Marc Lore (06:52):

I learned something, this was maybe less than a year before the bubble burst in the internet, so it was very easy to get 50 grand, a hundred grand from people without having any, I remember actually talking to an investor and they said, can you send your cap table? And I looked at Vinny, my partner, and I was like, what does he mean table? I don't know. So we looked it up on the internet, what does cap table mean? That's how we started. We didn't know any of that stuff, but we did sell it to Tops for 5.7 million a few months later and gave all our investors our money back and they were like, wait, you mean I didn't lose money? And we were just kind of depressed. We're like, oh, well we didn't think that was a good outcome. He's like, no, the NASDAQ burst. I got killed everywhere. I got my money back here. This was great. So all those investors that got their money back then we're the seed capital for

Sameer Gandhi (08:00):

And I think this is something thing that when you told me that story the first time, and it made me realize that you had, and we'll talk about this more, it shows up in all the other companies, but you have a very specific and special relationship with investors and the level of responsibility that you feel for investors is it is higher than you see in a lot of places. And that sort of that obligation to investors, it's very two-way street because you ask things and you give things, but getting your investors money back in bust is pretty incredible. And then I think when you look across all of your companies since then, and so we were with you in diapers and Jet and now in Wonder and Wonder's story is still to be completed, be told, be told. But in the prior two companies, I always loved the idea that you made money for your investors, not just on the company overall, but every round when an investor came in, if they were new to the company, at some point when there was a realization, they made money, every single round made money.


And I think you very consciously ensure that that was in fact the case you wanted to deliver for them. And maybe you could tell us a little bit about when you constructed these rounds, how did you think about making sure that you were able to deliver for your investors? I know that's so important for you.

Marc Lore (09:39):

Yeah, I mean I use this sort of rule of thumb where I try and double the valuation and double the amount raised with every round, and it was pretty close to that in Diapers and Jet. And so double the valuation means a hundred percent return and basically raise every 12 to 18 months-ish. It was more like every 12 months at diapers. And so when you raise the first institution around on diapers was 4 million. I'm thinking, okay, what do I need to do? How do I invest this 4 million so that in 12 to 18 months I can double the valuation and raise 8 million? And that's what I'm thinking of just kind of taking in steps and always thinking ahead to the next round. And so when we price this round making sure is that enough capital to grow the business, to double the valuation when you raise the 8 million and then when you raise the 8 million, do we have enough capital to double the valuation? If we don't, then the valuation's wrong. And so I'm trying to map out all the different rounds from now until exit.

Sameer Gandhi (10:43):

And it's part of this, when you double capital and valuation, you're giving yourself a lot of room to maneuver in that number because a year later somebody feels like they're weighing the money or they've doubled their value, they're feeling pretty good about it. Maybe you can be a little head a little behind, but it's not like you're really shaving it so thin.

Marc Lore (11:01):

And that's pretty much what happened at Diapers. It basically, it pretty much doubled every time and doubled the amount every time. And then Jet was pretty similar.

Sameer Gandhi (11:13):

You get all the inputs from the market and from other people and they'll tell you that, well, that's a crazy idea or it can't be done. And then you go think about, well, if it could be done, how would you do it? And you figure out how to solve all the problems along the way. And so with diapers, nobody thought you could sell diapers online. Nobody thought you could do consumer products online like CPG was not a category at the time was not at all right. Everybody would say low margin, big boxes, bulky items, commodities, all those reasons. You're not going to sell these products online and here you go start and in a way reinvent how people thought about a lot of elements of e-commerce, which you made Amazon React. That's a pretty big statement. And so what was it about the diapers opportunity that gave you confidence to do something that everybody said didn't make sense? It was very unconventional.

Marc Lore (12:05):

The original thinking, and I think this is important when you're an entrepreneur, you need to have that naivete of not knowing too much about all the reasons why something can't work, which I feel like that having done a decade-plus of e-commerce more than that 15 years in e-commerce, when somebody would share an e-commerce idea, it's so easy to poke holes in it, the industry really well, you need that naivete to basically say why not? And ask the question why not? And when I started diapers, when we started, I was a new parent and always going out and buying diapers and thinking, this is ridiculous. This is a commodity. I don't have to try it on. It's not a size problem. It is for clothes and things like that. You should be able to get diapers delivered and there's not going to be any returns and you should be able to do it.


And when I went online, nobody was selling diapers at all or they were ridiculous prices. And so you start asking industry people and everybody had the same answer. It's a loss leader for Walmart and Target, it actually drives traffic in the store so they're willing to take a loss on it. And that was the aha moment. I said, okay, well how many things are they selling? They're like, oh, in a Walmart there's a hundred thousand things and online there's millions, tens of millions, hundreds of millions. So if it's a loss leader to drive traffic in the store to sell everything else and there's only a hundred thousand, couldn't you take a bigger loss online because there's so many more products to monetize the relationship across. That was sort of like the aha moment. And every time I started testing this on people, nobody had a good answer.


They're like, yeah, I mean I guess in theory that's right. It was like that kind of thing. I'm like, okay, we've got something here. And in the beginning, like you said, Proctor&Gamble and Kimberly Clark refused to sell us diapers because they thought it's impossible to make money and we're going to go bankrupt. And as we started to build a relationship with the parents and they loved the experience and we were able to sell everything else in baby and then eventually pet and drugstore and toys and home and we started doing all this stuff, the mass started to pencil, we were making more money even though we were losing more, we're making more than you would in a traditional store. And now today, if you look at it like Amazon, Walmart and these e-commerce players, they've driven down the price of diapers to ridiculously low levels online because the math.

Sameer Gandhi (14:43):

I also felt like we take it for granted today about delivery speed and the level of service that you can get. I mean, although one could argue that it's diminished recently too with other players and it's pretty crappy service, but the thing that was so amazing about diapers was when you set it up, you had that two day and sometimes even overnight, overnight, but at a price point where you just define the whole logistics system to enable that to happen. And everybody then had to start doing today. And so it was a totally different kind of level of service that people, they paid for either a little bit more or they had so much loyalty to it. And I remember that the word of mouth, that diapers was so high, it made the marketing really efficient because people would just literally would say, this is the most amazing thing they would tell other people about it. And what I really liked was when you said, what was it, Thursday was your day that you would get on the phones. It was some day that you just picked every week to sit in customer service and answer the phone, right? 

Marc Lore (16:00):

Yeah. That was so valuable to hear that insight from the customers directly and live. It's one thing hearing it from somebody else, it's totally different. If you see a report and it's like this many errors, this many things, and you look at it and you're like, oh, it's not that bad 1%, half a percent and stuff, when you get on the phone and that customers irate, you feel that visceral sort of reaction and no, we can't do any of these things ever zero and if we do orders free, you realize that you've lost a customer, but you can't see that come through in the report. You have to actually hear it and certain things with the same percentage problem, one of them, they look the same on paper, but you get on a phone is very, very different.

Sameer Gandhi (16:40):

Yeah, I think that was a massive insight because the fact that you could even get somebody on the phone, but then I saw how you empowered all your customer service people to solve the problem for people or for customers and the stories from diapers were legendary, like driving diapers in a snowstorm to get them to a customer. Things like that where you just literally driving just to take care of formula.

Marc Lore (16:59):

Baby formula.

Sameer Gandhi (17:01):

Had to get it there. That's part of what created that company and that whole aura around it, and I think it sort of put e-commerce on a different footing.

Marc Lore (17:12):

You're right though about the fast shipping was there was the aha moment was you mean paying normal ground rates to FedEx and UPS? You could actually get the product overnight to somebody if you're close to the customer. That was like, believe it or not, back then it wasn't. We didn't really understand that completely. And so you had to put warehouses in the product in close to enough proximity to all the places that you can reach two thirds, 70% of the country overnight with diapers and big heavy stuff. And that really wasn't, nobody was doing that at the time. Amazon wasn't doing it.

Sameer Gandhi (17:48):

No, I think you forced them to have to. Everybody else had to do it.

Marc Lore (17:54):

Really fun. And then figuring out a way to get all the products in the same box because you got charged double for two boxes, but one box you didn't. And so how do you get the box to be bigger, but it had to be under 50 pounds and how do you fit everything in the box and we build all these algorithms and things. It was very, what we realized is and learned a ton about is how every basis point matters in e-commerce. The giants today are making low single digit operating margins. So literally every basis point mattered and learned a ton about logistics and how to pull basis point here, basis point there out of the cost system. And that I think is, I'm sure we'll talk about this later, but what prepped me and the team so well for Wonder because we're now operating in an environment where a Chipotle or a Kava is running mid twenties operating margin four wall and overall as a company like high teens, so there's so much margin to play with the same rigor hasn't been applied to food because the basis points haven't mattered.

Sameer Gandhi (19:01):

One of the things that I didn't know before, you explained to me, and we were in a board meeting and we were just talking about the baby business and then you said something like, well, okay, that's fine, but I want to tell you about the BHAG. I'm like, what are you talking about? What is BHAG? I didn't know what it was. You're like, no, this is the big hairy audacious goal and this is when you flip the whole business on the side and said, this is just a platform and we're going to do all these other categories, all the verticals and leveraging all the same logistics infrastructure, but now we have these verticalized shopping experiences that are highly tailored and itself an interesting story. But to me it was how your mind was working. You had a business that was doing extremely well, but you were already thinking much further ahead and in a very ambitious way, in some ways you're willing to take a lot of risks to go after a bigger opportunity. I just want to have you talk about how you blend that longer range vision and big ideas with all the details you have to do to execute day to day. Because in e-commerce business, as you were saying, it's all basis points. There's a lot of details and you are on top of all of those, but you were able to do the other thing at the same time and it's, it's hard to balance.

Sameer Gandhi (20:25):

It's hard to balance. 

Marc Lore (20:25):

Hard to balance how you do it. I think I've talked about my sort of framework, VCP vision capital people, and on the V side of things, having clarity around the vision and clarity around the strategy. I think it's really important for the entire organization to truly appreciate all the nuances of the vision and strategy. So everybody is 100% aligned on where we're going, but all the focus data to execution is where you are today. So sometimes people are so focused on today, they don't have clarity or vision and you kind of just meander. And then like you said, some people will have the big vision and then just want to do a hundred things at once and do nothing well, right? And so I think it's this clarity of mapping out what is our strategy and strategy involves sequencing of your moves. That is the strategy. How are you going to get to this big vision?


And sequencing is a big part of it. And so as part of the sequencing, we can talk about this at wonder is you have to have a foundational core that's differentiated, that is meaningful and ownable in its own right and to crush that, but at the same time be thinking about the sequencing and how to stitch together from where you are at the core into this big vision and making sure that if you do enter into it a new aspect, the way to the vision that you ringfence it in a way that doesn't disrupt the focus of the management team working on the core business. So a lot of it has to do with organizational structure and how do you carve things out so that the CEO or the CEO or the key people aren't thinking about that and you can say, well, yeah, it would do better if they were thinking about it, but that's the balance.


But it's more important to have the key people focus on this and hire a really good leader that's ring fenced to focus on the next thing. And it's okay if that thing wobbles and does it takes time, it doesn't matter because when it's kind of ready, then this team can say, yeah, give me that. I want to bolt that on now I see it. It's working. You proved it. Now the operating core can bolt it on. One thing I also want to add too, I see this happening, it comes up a lot is geographic expansion. So people working in one area and they're very eager to want to expand all over to the cities and all over the US and the world and things because worried about competition about the land grab and land grab and things like that I think is very dangerous, especially in a business where customer experience and scale really matter.


And I would, and we are staying very, very focused from a geographical area for that reason. So even though we've got this big ambitious goal of becoming the super app for mealtime, which is massive, the big vision is 21 meals a week. We want customers and eventually use gen AI to know your preferences, to know your budget, to know how you eat, the kinds of foods you like, be able to track your nutrition and you can us how you want to eat from a health perspective. And then you text us what time you want to eat lunch or what time your family wants to eat dinner and the food just shows up. It could be a meal kit, it could be cooked food from a local restaurant, it could be cooked food from Wonder directly. It could be groceries and a recipe if you're in a lower budget. The idea is that everybody in the world has a personal chef basically where they're outsourcing all their meal. That is a big vision and how do you piece that up and attack it? If you start doing all those things without having a profitable core that customers love, it's not going to work.

Sameer Gandhi (24:12):

Describe that core experience. I think if you live in New York or nearby New Jersey, you get to experience Wonder and it kind of blows you away. If you're in another part of the country, you may have read about it or heard about it, but you've never really experienced it. And we know what, especially with food and with it's an e-commerce style business, you have to have that just delight moment of the first time you try it go like this is fricking awesome, right? But just tell us about what that core experience is.

Marc Lore (24:41):

The core experience, I would say the easiest way to explain this sort of a next generation fast casual. We all know Chipotle and Kava and Sweet Green in these fast casual places. We've managed to create 30 different fast casual and we call some of them fast fine restaurant chains. And we've managed to be able to cook all 30 restaurants in a single 2,800 square foot kitchen with just two pieces of electric cooking equipment without any hoods, gas flames or chefs. So we've built the kitchen to look more like a micro fulfillment center where a single person on the cook line can cook the food off peak for all 30 restaurants. So it's got conveyors, there's automation, we built all the tech, but we're talking 30 different restaurants. Everything from a high end steakhouse like Bobby Flay or Jose Andreas down to burgers and barbecue and fried chicken and everything in between salads, Mexican, Italian, Greek, middle Eastern, Chinese, Japanese, Thai, all these restaurants from some of the best chefs and restaurants around the country are available in this one location for pickup, some minimal sit down or delivery.


And on the delivery side, because we've got so many restaurants in a single location, we're able to set a six minute maximum delivery rate is in the city in 10 minutes in the suburbs. So we're able to get the food to people hot and fast. We're under 30 minute order to eat, but the maximum delivery time in the city is six minutes. And you can order from each of the restaurants. Everybody in the family could order from a different restaurant. It's all sequenced in the kitchen to finish at the same time. We own the delivery, we're vertically integrated so we can time the courier with the cooking so the food doesn't sit in the kitchen as soon as it's done, it goes in a hot bag maximum one minute wait time, courier grabs it and it's to your door in six minutes max. So we've managed to create this first party experience that gives you the choice of 30 different fast casual type restaurants, but we're able to do it with incredibly low labor and low waste, which is the breakthrough on economics.

Sameer Gandhi (26:49):

And then what I see in this, which I think is great, is I see the building blocks from the prior companies being applied in this company. So you described all that, but it's so complicated in terms of the things you had to figure out. It's like we're talking about redesigning the food supply chain just like a jet and quid C you designed supply chain and innovated on that. We're talking about rethinking how recipes work. 

Marc Lore (27:13):

Cook a steak in six minutes, sear it on both sides to perfect temperature every time by just pushing a button.

Sameer Gandhi (27:19):

Which is a lot better than the thing you get from DoorDash Uber Eats that's been sitting in somebody's Prius for 35, 40 minutes right before it shows up. It's a totally different experience. It's just interesting for me to see how you took all the prior learnings and you kind of knew those things and then launched into this new category. It's all the e-commerce learnings into food.

Marc Lore (27:40):

And it's great because we are a tech company, food tech company and we built all the technology in the kitchen. It's really cool. We have this understanding of what a micro fulfillment center looks like for e-comm, and we've gotten to the point in the backend in the kitchen where we see a path to continue to automation where five, 10 years from now it's largely automated the actual cooking of a steak or cooking of a pizza or bino or salmon or barbecue because of the way in which we've engineered the food to cook, which is these two pieces of electric cooking equipment. So I think we've sort of done what McDonald's has done to burgers and fries and the system they built. We've sort of systematize the cooking of every cuisine, 30 different cuisines and there's still more to come.

Sameer Gandhi (28:31):

Marc. So I want to go back in time to Jet after the check in the restaurant when you really started it and everybody, all the articles were like, Marc's crazy. He left Amazon, he's going to go compete with Amazon, which is obviously not what you intended to do, nor should anybody, but you learned a lot about e-commerce and you learned about things working all those years at Amazon. So what was the insight that led you to Jet that everybody thought was the Amazon competitor?

Marc Lore (29:08):

E-commerce as a market was heading toward a trillion dollars in the us. 50% of retail was coming online and Amazon was really the only player of any significance. 

Sameer Gandhi (29:20):

There's nothing that was going to stop that.

Marc Lore (29:21):

That, no, nothing was going to stop that, but felt like there was really a lot of room for a number two. There really was no number two in e-comm, and if you had just 5% of where Amazon was, that was going to be Amazon's what close to 500 billion in GMB now or something like that, 25 billion revenue company to just be 5% the size. Talking to myself, giving myself advice back then to do that versus let's say wonder, I would've told myself, no, do wonder. It was, that concept was on my mind back then, but I sort of took the sort of, hey, I had the investor base that knew E-comm had the people that knew e-comm, I knew e-com and it was just right there. You can just do it tomorrow and go do it and create a big business.

Sameer Gandhi (30:07):

To me, it made a lot of sense. People don't always aspire to read the number two, but sometimes there's multiple winners in markets depending on how you look at it. I guess that's true.

Marc Lore (30:16):

I guess.

Sameer Gandhi (30:16):

That's true. You built it as a technology enabled business with a very different value prop than Amazon because that's the only way it was going to work. And I think it's just interesting to reflect on that because the company, the life was very short because Walmart came knocking very quickly. That first billion of GMV was coming pretty fast.

Marc Lore (30:35):

Like 10 months.

Sameer Gandhi (30:35):

10 months. And then we sold the company, you sold the company with Jet. You had mapped out all the fundraisers and showed 'em to me in the seed round when we did the seed round and you'd like, okay, this is what the company will look like and then I'm going to raise that much and I get to the next one. And I don't know that a lot of founders in their mind sort of map out the whole journey and it's never going to be perfect, but you sort of have to know where you want to get you.

Marc Lore (30:59):

Yeah, you got to kind of map it out and also know what your rubric is for valuation so that you know what you need to do, whether it be revenue or later on profit and what hurdles you need to get to the valuation that doubles each time and make sure that you have enough capital to do that. And so I do think the budget and everything and how you invest that capital all has to come together and you kind of need that skeleton of a plan that straw man I call it, of a plan. 

Sameer Gandhi (31:29):

Does that help you not get so far ahead on valuation where then you see a lot of, especially now you see companies that are now, I'm never, I have to grow in this valuation, but I have to go raise money and I'm upside down. It's very challenging.

Marc Lore (31:43):

Yeah, you'd never want to have a down round. I always tell people it's okay. People say, oh, well if I can get this valuation, I should just do it, but I'm always thinking about the next round. It's not about this round. You can get whatever you can, but if you can't double the valuation next round in your own mind based on normal metrics that you could defend, then you set yourself up for failure. The worst thing you can do is lose momentum with a flat to down, round down round is a killer. Even if the company's valuable, I think purposely holding back the valuation to say, Hey, the market's got ahead of itself, I'm still going to be, I'm not going to do that. I'm going to raise it at a low valuation and even if the market does come back to us, I can still double the valuation and double the raise next round.


And so kind of mapping that and understanding what you need to prove with each round, what you need to prove at seed is different from A, is different from B, is different from C in seed, it's about the vision and the founder at B, sorry, at A now you have to have some customer traction. Do customers love it? And how do you prove that customers love it? And then you get into B and it's now proving that the unit economics are working and then you get into C and it's got to be unit economics are working, customers love it. You're scaling and you're ready for some fuel, right? And each, I dunno if that's exactly right, but there's a certain thing that you need to prove with each round and different types of investors are used to playing in that lane and you want to make sure that you're positioned well for that lane.

Sameer Gandhi (33:14):

Sometimes you get upside down where you're trying to raise this sort of like C round, but you're still back on really just learning about the customer at that point and you're like, no, that doesn't work. So you have to make sure you have enough capital to do what you need to do to get to that next level of proof where you can bring in that next class of investor that understands and you understand what they're looking for in a B round or in a C round or in a D round. What you don't want to do is you won't under capitalize either. I see companies do that. It's like you really need to make sure you raise enough capital to build the infrastructure to support the growth. So it is like a little bit of a puzzle. That's why you need to have that clear vision and strategy and the sequence into the moves and then map out the capital plan and know what you're going to do with that money and where it needs to get you and what you need to prove with it. I always try to be transparent, like, no, remember what I said with Jet, we're going to burn a billion dollars or with Wonder we're going to burn billion dollars, 2 billion. There's no shortcut to this stuff. 

Sameer Gandhi (34:20):

That makes you flinch, this is the wrong investment.

Marc Lore (34:22):

It's the wrong investment. And somebody says, whoa, you're going to burn a billion dollars. Your burn is 20 million. That's crazy. It's like, but let's look at the size of the prize. Let's look at what this infrastructure is going to deliver. Let's look what the valuation is at different points in time. Does that make sense? If you knew you could invest a billion dollars and create a 10 billion company in three years, would you do it? Yes. Okay, so let's work backwards. Let's see, and a hundred billion dollar company in five or seven years, you would put two or 3 billion in, right? Yeah. So everyone agrees that the math works. There's something that is just terrifying to some investors. 

Sameer Gandhi (34:59):

The numbers seem scary when you're in this phase.

Marc Lore (35:01):

Right now. The numbers seems scary when you're investing in growth and losing money.

Sameer Gandhi (35:08):

Let's talk about the P though on the VCP because I feel like you've built a, you have a very specific approach to assembling your teams, and I've seen that evolve over time. One thing I remember was you went and said, I'm not going on the resume anymore. I used to look at the resume. You remember this conversation we had a few years ago?

Marc Lore (35:32):

Honey potting. Yeah. So I've obviously interviewed too many people to count over the last 25 years as an entrepreneur. But yeah, I used to always say, I want to interview someone, spend some time with them, use my gut intuition, feel like it's somebody I want to have a beer with, and I'm like the complete opposite. Now, I've just learned so many times that in an hour you cannot tell. There's no intuition thing. You just cannot. You can tell a person's going to be a good culture fit, but you cannot tell how good they are. Some people are more polished, some people are less polished. I always go to the resume and before anyone gets an interview, the resume has to scream superstar to me, which means a demonstrable level of success in every business that they've been in, moving, being promoted.


And most important, when they move from one job to the next job, it's a move that a superstar would make. Does it make sense? You go into Google, you're there for a year and a half and you leave to go to, no offense to Sears, but I would look at that resume and say that a superstar wouldn't do that, right? So just so you say, your star, your top 5%, does that move make sense? And when you really look at that very strict lens and you got to be strict, it's so easy to talk yourself, oh, it's okay. They probably just, no, no, probably just what did they do? Sometimes there's room for, it doesn't have to be perfect, but just by and large, somebody's in a company, they go into a startup, it's a hot startup. I want to see them there at least four years, get your full vesting, show multiple promotions, and if you're going to leave a really hot startup, it better be because you just got a job, you couldn't turn down anything else done, right? So it's sort of that. Then once you, the resume screams and there's a lot of resumes you go through, you get it very, very high hit rate now you're just interviewing for is this person matched the eight behaviors that we've outlined in the company of people that we want, traits that we want people to have.

Sameer Gandhi (37:47):

Remember you did that at Jet too. You had these core traits you were looking for and everybody would interview somebody.

Marc Lore (37:54):

And it has to be the interview process. It has to be the performance management process. One of the things I've really learned to appreciate, which I didn't at all, is how important the performance management system is to retain and motivate your most talented people. And so we've over time built a system. We're transparent with compensation. So if you want to hire hundreds of people really fast, the whole comp system can completely out of whack. So making the comp system transparent where this is how much salary at this level, this is how much value of stock. Of course the stock units will change as the company appreciates, but the value's the same at every level and everybody in the company at that level makes the same amount of money and you're transparent. Here's the thing, if you're a director, I know what you make, you're a vp, I know what you make, you just look at the comm table, and that was sort of what we did at Jet and it worked really well. I was able to hire people fast because you'd interview somebody and say, Hey, this person, look at our directors. That's the cohort. Is that the cohort? Yes. Then you tell the person, Hey, here's the comp. And then if they say, Hey, I'm making more and say, listen, this is your cohort, this is the market, they're all here. This is it. We feel really good about it. And very, very rarely do we miss somebody based on that. And if we see a couple data points where we are off market, we'll move the whole band. 

Sameer Gandhi (39:17):

Change the cohort.

Marc Lore (39:17):

Yeah, we'll just say call the directors. Hey, you're all getting a raise. Because we were kind of off market, so trying to keep it right. But the performance management piece, which is something that we hadn't really focused on as much is especially these days, people want to know when they're young, what do you need to do to get promoted? And they want to get promoted rapidly as frequently as every six months. And a lot of older school people say every six months, no, you put the years in and then promotion's a big deal. It used to be when we were young, it's not like that anymore. It's TaeKwonDo belt strategy. You want the white belt, then you want to quickly get the yellow belt, the green belt. You want to start getting the belts quickly. And so we built a system where the very best people in the company get promoted every six months for the first four or five years of their career. Every six months you go through a performance management system. We have 360 reviews, everybody gets scored. Manager does it on behaviors, on performance metrics. It all gets blended into a score, goes into a model, and depending on your scores and things, shows how fast you move. And the best performing people get promoted every six months.

Sameer Gandhi (40:24):

Because the best people they want, they want to move.

Marc Lore (40:27):

They want to move and want separation from their peers and cohorts, the cohort that they're in, if they're doing really well and they want that incentive. And so I think that has really helped us retain and get the best out of the best people. If you can create a culture that where you can attract, retain, and get the very best out of the very best people, that's a big check on the P box. That's it. You can't beat that, right? You can attract the very best people. Some companies are good at attracting the very best people, but they don't necessarily get the very best. They've got to give. That's the magic. Attract the best people, have them happy and wanting to give the very best they got. And I think that comes down to the mission, the core values. Our values are trust, transparency and fairness.


Being really open with information, trusting people, creating a very fair and equitable work environment and really empowering people. And that's the kinds of people that we hire get really motivated by that feeling empowered. Then this is really under the V. Some people think about organizational structure as really like a people function thing, but organizational structure is, I put under V because you can have the best vision and the best strategy. If you don't have the right organizational structure to support the strategy, everything falls apart. And so the goal of the organizational structure is how do you minimize the number of dependencies that a single individual has to deliver against the most important metrics laddering up to the key strategies. And so when you look at your company and you say, okay, these are the key strategies for the company, and these are the most important metrics, can you take the most important metric and have a single individual own it end to end and build the org structure around that?


Because once you tell somebody, oh, this is the most important metrics in the company, but you own part of it, you own part of it, you own part of it, you own part of it, stuff starts to break down. And what you find when you go through the exercise is it's like a puzzle. You're trying to, I call it maximize the number of ownership points of the most important metrics. And then what you wind up having is an organizational structure that is geared to deliver on the key metrics which support the strategy with the least amount of dependencies, with the most accountability.

Sameer Gandhi (43:04):

It's really phenomenal because if we were in a business school classroom, we would talk about all this stuff, but then you translated it again, back to harder numbers and really pressure test whether we're doing what we say we're doing, which is are we making the best people accountable for the most important things in the company and deliver the most important result? And the thing that blew me away about this is in the conference room at headquarters at Wonder, it's like the beautiful mind room, right? With all this stuff is all written around the walls and I could see the team coming together and debating it, but then you all agree to it and everybody's marching in that direction

Marc Lore (43:42):

And every week we meet and discuss it because there's always nuances that need to get tweaked and things. I think, and I didn't do this before, I did two companies, three companies, four companies before this, but is the discipline to have your entire leadership team be a part of it in every week to carve out an hour to just talk about VCP? Because when you're running every day, you don't, somebody else's strategy is working on a paper and they send it around, somebody reads and does some comments and then it's, that's it. It's in the drawer. Literally every week we look at the vision statement. Is that right? Anything that would make us want to change it? And inevitably every week it's like, is it always, and everyone's looking at like, no, it's not always. Why do we have the word always there? And we change the word always to sometimes it really gets people reading it, thinking about it, and then the context of how we're managing the business.


If everybody in the leadership team is aligned with the clarity of the vision and each individual strategies and the most important metrics and the organizational structure, that v's in good shape. And then you've got the capital plan and the pitch deck and all this stuff under C. And then you've got values, the mission statement, the behavior is the performance management system, the compensation system under the P, and you get all those things right? Those foundation elements stuff just starts to work. You're getting the best people in the company, they're highly motivated, they're in the right organizational structure to support your strategy, to support the vision. And you've got a clear capital plan on what you need to raise when, what you need to do with the money, and here's the pitch deck to sell it. It's all the foundational pieces.

Sameer Gandhi (45:21):

You keep working on it, but eventually it aligns. The whole thing aligns and then you start to see progress in the business. It's pretty amazing to watch, but I like how you translate it into a framework that now everybody's using. So I thought I'd give you a chance to talk to one of your younger selves anywhere along the way. And just if you could go back and give yourself advice as a serial entrepreneur now you've learned all these things, what would you go back and tell yourself to go do?

Marc Lore (45:52):

If you go to Marc in college, and I think a lot of college people get this wrong, I would say the most important thing you can do when you go and get your first job is the most important thing is who are you working for? Who is your boss leader? That's where you're going to do the most learning. And you should be thinking this mindset of early in your career. Don't get too impatient, don't get too anxious. Just learn, learn, learn. And so whatever's going to accelerate that learning. I think the person you spend every day at work and you're interacting with and it's giving you direction and showing you how to be a leader is so invaluable. And then I think you can learn a lot from the company you work at and the value system and how it operates. And if it's a startup, how the policies and procedures and the all hands and how that works, then it's job, then it's money.


Unfortunately, people usually flip it around. Usually it's money. Job company's the company and I don't know who I'm working for. That's usually the way it is. And I think people just have it wrong. It is so important. If you think about an individual as just like a stock, A stock is worth the present value of all expected future cash flows. You got to think about yourself as an individual in the same way your value is the present value of everything you're going to do in the rest of your life. And the biggest way to impact that is learn as much as you can, absorb, ask questions. That was the first thing. The second thing is, and I got this wrong too. I thought it was sort of me against all my peers. I'm going to be the best. I'm going to outwork everybody. I'm going to show everybody up.


I'm going to just be the best. And if I'm the best, then I'm going to get promoted and move and make more money and move faster. And I think that's a fallacy. The most important thing you can do as someone young that's sort learning is to actually be the person that lifts others around you up. And it's one of those things where you don't maybe fully understand or appreciate how valuable that is because you're like, well, am I'm helping this person look good and helping that person look good? And what about me? I want people to think I'm good. And people do. The leaders know they see that. I remember Doug McMillan at Walmart said this too. He said the most important thing he looks for in a leader is he wants to promote the person that's lifting others up around them. And Doug did that, and he went from stocking shelves to being the CEO O of the world's largest company, and that was his mentality.


He was always looking for ways to help others, help others do more, be better, and really unselfish in that way. And in return, you wind up getting the biggest, best job, but you have to be patient because it doesn't happen overnight. You have to be patient. But if you're always the person that's lifting others up, first of all, your peers will say great things about you, great karma comes out of it. So it's more giving more than taking early in your career and just being open learning, being curious and not worrying about the competitive dynamics of like, am I going to look this way or look that way? That's a long answer.

Sameer Gandhi (49:17):

That's great advice, which we could all go back and tell ourselves to heed that advice. Awesome. Well, thank you, Marc. It's really, thank you. Great to sit with you and to partially reminisce about all these experiences that we've had, but really to talk about the things that I think you're putting out there that are going to be just great pieces of learning for entrepreneurs and founders. So I appreciate the time.

Marc Lore (49:39):

Yeah, no, thank you so much for having me here and I learned a lot talking to you tonight and I've learned a lot in my career and I’m just happy to be able to share some of these learnings and hopefully help an entrepreneur too.

Sameer Gandhi (49:52):

Let's go get some Wonder.

Marc Lore (49:53):

Okay, great.

Meet your host

Consumer, Cloud/SaaS, Media

Sameer Gandhi

Sameer Gandhi is a Partner at Accel, with a focus on investments in consumer, Cloud/SaaS, and media companies. Read more about his work.
Season 1 of the Spotlight On podcast, by Accel


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