Instacart's Fidji Simo | Building A Tech-Enabled Food System

Hi everyone. Welcome to Grey Matter, the podcast from Greylock, where we share stories from company builders and business leaders. I'm Heather Mack, head of Editorial at Greylock. Today, Greylock General Partner David Thacker interviews Fiji Simo, who is the CEO of Instacart. Simo joined the online grocery Delivery company in 2021 during a period of significant growth due to the pandemic. As people have largely returned to in person lifestyles, the demand for many online only services has adjusted accordingly. But the appeal of virtual services still remains high and many industries have been permanently altered by habits and expectations consumers picked up during the pandemic. Moreover, the pandemic induced acceleration in digital transformation was critical in bringing many antiquated industries into the modern age, but many glaring issues with inefficient processes and lack of visibility persist. With groceries still among the least digitally enabled sectors of commerce, Instacart sees plenty of opportunity to build technology that will lift up all stakeholders in the ecosystem, including stores, brands, shipping, logistics, and of course, everyday consumers. Simo, who previously worked at Meta for more than a decade and oversaw the conceptualization, development and release of many iconic products, is accustomed to taking bold bets on transformative technology. She spoke with Thacker about identifying moments in time where new technology can find traction, what she learned from leaders and mentors throughout her career, and how she approaches leadership, and how she separates major disruptive events from secular trends in order to chart a sustainable business course forward. This interview is part of Greylock's Iconversation series. You can watch a video on our YouTube channel and read an essay of the highlights on the content section of our website greylock.com blog. Both links are in the show notes and if you aren't already subscribed to Gray Matter, you can sign up wherever you get your podcasts.

Good morning everyone. Thanks for being here. It's an honor to have Fiji here today with us to talk about Instacart and a few other topics. So let's dive right into questions and at the end we'll have time for audience questions, so be thinking of things you'd like to ask her. So Fiji, you joined Instacart in August of 2021 and that's a period of hyper growth. It was, you know, coming out of the pandemic, the company had seen pretty spectacular growth. You know, most of us think of Instacart today as grocery delivery. I'd love for you to take a step back and just kind of define Instacart for us. What are your ambitions for the company.

Yeah, it's a great question. And hi everyone. Happy to be here. So when I decided to take this job, I saw that Instacart was already a great service. You know, that saves a lot of time for families. But I saw something much more than online grocery delivery. When I looked at this company and I had benefit of being on the board of that company for six months before taking the job. What I saw was a massive trillion dollar industry in the midst of a massive digital transformation. And it's interesting because grocery is the largest category of commerce. It's the least penetrated online, and it's the least digitally enabled. And I saw this opportunity for Instacart to become the technology backbone for that entire industry. And so when you ask, like, what is the vision for the company? The vision is to build all of the technologies that can power every grocery transaction. And that is a much more expensive vision than just online delivery. And then the second thing that I really changed was the way in which we engage with partners. Where I thought about it from the point of view of really lifting up the entire ecosystem. Instead of having this tension between Instacart and the grocers and being an aggregator, really what I wanted to do was being an enabler for all retailers for them to grow. And when I arrive, I changed some of the company values. And one of the ones that I put in place is called grow the pie. And I think it's really important, especially in this macroeconomic context where everybody kind of goes to scarcity, kind of goes to like, oh, someone needs to lose for me to win, to realize that in technology, technology leaves all boats. And so we could afford to have a strategy that was really anchored in making the entire industry better and we would benefit as a result.

Yeah, that's great. And you know, one of the things that's on a lot of people's mind here is the current economic climate. Instacart was a huge beneficiary from the pandemic. But like many companies, as we have kind of gone back to a new normal, you've seen some tempered growth. How are you thinking about investing going forward, especially with the uncertainty of where the macro economy is going?

Yeah. So I think it's important to kind of decouple what Covid did and what are secular trends. And if you look at the secular trends, at least in my business, like I said, you know, online grocery delivery was 3% penetrated online before COVID After Covid, it was 10% penetrated online. So that still gives us a lot of room for growth. And yes, that's not going to be, you know, 4 to 5x growth like we saw in 20, 2020, but that's going to be steady growth that we need to continue fueling. Now, you ask a good question, which is, in this macro environment, how do we think about things? And for me, I have clearly carved out some of the like, sort of big bets and investment for the future. And a big one that we are making is this idea of not just moving the industry online and doing online grocery delivery, but also building technology for the stores. And that is future growth. And in the meantime, for core business, we are really looking at the macro condition and being extremely responsible. Given that we don't really know what the next few years hold, there might be a recession. You know, food usually is pretty well positioned during a recession. People still need to eat, but certainly we see some adjustment in, you know, how people consume. And so we want to be prepared for that and therefore driving the company with way more efficiency and way more attention to, you know, productivity and how we spend our resources than we ever have.

Great. And you were on the board of Instacart before you became CEO. I think you joined in January 2021. So what was it in those seven months as a board member that you saw or that you learned that made you decide you wanted to jump in and take the reins?

I joined, you know, after 10 years at Facebook and I was leading the Facebook app, and I didn't think at all that I was going to leave Facebook. I loved my job, but I wanted to be on the board to kind of learn more about other businesses. And during those six, seven months, I spent, spent a lot of time with Instacart's founder of Programmeta, really understanding the business and really kind of helping him understand, like, what he was going to take to take it to a much larger scale. And at the end of that, he kind of concluded that it might be better for me to go do that. And the thing that was really exciting for me was this idea of really transforming an entire industry. Not just like having a service that was, like, great for consumers, that that's a given, that's really important, but do it in a way that can really transform an industry and lift all boats and especially an industry that is so critical to people's health, to people's lives. I mean, when you think about food and like beyond groceries, entire food supply chain, we would be living in such a better world if that entire supply chain was technology enabled. We would have less food waste, we would have More food traceability. And so the fact that we can build for that entire industry gives us a massive opportunity to affect a lot of, you know, important problems in the world. And so to me, like, that's the thing that really convinced me. But, you know, it's really hard to step into a CEO role in in founder led companies. And I think a lot of what helped me was two of Instacart's co founders are still at the company, Max and Brandon. And I really went to them for advice on how to unleash the DNA of the company and what made it special towards my vision. And instead of coming in and being like, okay, this is how I want to get it done, I really kind of spend time validating my vision with the leaders internally and also really understanding how we could unleash the existing culture towards this kind of bolder, more ambitious vision.

Yeah, I know that that founder to CEO transition can be very difficult, but it sounded like it's worked pretty well.

I wish it was a little bit more accepted in the industry that you can make that transition because, you know, there are actually not a lot of founders that can scale from like being the absolute best at the 0 to 1, all the way to being the best at massive scale. Like, these are completely different skill sets and it's amazing when people are able to be there for that entire journey.

Great. So let's switch topics to Facebook. You joined Facebook in, I think, 2011 as like a product marketing manager and you spent a decade there, took on increasing responsibility on the product side. Eventually you were running the Facebook app, one of the most senior executives there. So when you think about your leadership and growing as a leader, I'm sure Facebook was your formative sort of experience for that. Are there any key moments that you reflect back on that you say that really you grew as a leader within Facebook?

Oh, absolutely. Well, there was this moment where Mark Zuckerberg asked me to lead ads inside news feeds and therefore inside mobile. And that moment was when the Stock was down 50% and CNBC was running headlines saying Facebook will never manage to monetize mobile. Which is a little stress inducing when you decide to take that job. And the things I was really interesting at that moment is I realized that if you want a great career, you can't always play it safe. And you know, I'm talking to a group of founders who clearly have understood that already. But, you know, it wasn't obvious to most people that we could monetize mobile. In fact, the opposite was more obvious. And by Making the non obvious bets and making them work. That's kind of how you can really change the trajectory of your career, but also of your life in general. And the same thing happened with video. After we figured out how to monetize mobile, we realized that the world was moving massively to video. But even inside the company there were plenty of people were saying Facebook should kind of sit this one out because YouTube has been added for eight years and there's no way we can do something in that space. And so again, I jumped in with seven engineers at the time were mostly in charge of making sure that when people would share a YouTube link, it would play in line. And we started building what is Facebook video. And there what was interesting and a big leadership moment was the launch of Facebook Live was amazing overnight success. So launch of Facebook Watch, however, which was like the video destination within Facebook, like took a long time to get right. And realizing that you need as a leader to be very stubborn on the destination but incredibly flexible on the journey to get there was one of, you know, big realization of that moment and we pivoted a lot of times to get to the right answer. But I was very determined that, you know, people wanted to consume video in a destination the way in which they wanted to do that. We iterated a lot until we got it right.

Yeah, those are both examples you mentioned where mobile monetization video transformational for Facebook. I think companies hit these inflection points when they discover these things. And what's funny is the headlines 10 years ago where Facebook will never monetize mobile in the paper today the headlines are Facebook will never monetize the metaverse.

I wouldn't bet against Mark.

Yeah, we'll see. So let's switch to talk about talents. So we'd love to hear about how you assemble high performing teams. And as you've come into instacart, you've had to build a leadership team, you've attracted people together. How do you go about this? How do you attract the right people? How do you assess the right people? And then how do you make sure that they're working seamlessly together?

Yeah, that's a great question. And I could spend many hours talking about this, but at a high level on attracting talent. I think of it as twofold. Yes, like recruiting can be like the analogy of a magnet, but it should also be the analogy of a bouncer. And like sometimes we're so focused on trying to attract talent that we skip that step. And my biggest mishayers were people that on paper looked phenomenal. And I was like, I would be so lucky to just like lend them. And then you realize you don't do your due diligence enough on figuring out, okay, are they going to be a great fit with the culture? Are they complementary with the team? Are they really taking this challenge for the right reasons? And so I spend a lot more time almost in that like bouncer role. And any execs that I hire, I always have this one big conversation during the hiring journey where I tell them we're going to sit for an hour and I'm going to give you all of the reasons not to join Instacart. And like people are a little bit surprised by that, but trust me, like, if they join after that, you know, you have a keeper. Because we all know startup ups are no joke. Like you need people who have like grit and want to be there and are going to ride the ups and downs. And so that's a very big part of like recruiting. So the thing I care enormously about is really understanding people's magic and unleashing it as part of a leadership team. And so I do this exercise where, you know, during my leadership team dinner, I kind of talk about like the magic that I see in everyone. And I invite the leaders to share with the rest of the group how they do a certain thing and trains the rest of the group on that. And what it leads to is that they end up really helping each other during, you know, tough times, leveraging the skills and the magic and the superpowers that, that they know they have. And what it does is that each of my leaders are not just like my chief comms officer or my chief product officers. I tell them, you are a set of leaders and we're running the company together. We're partners in making this business better. And yes, you might have a tit of chief comms officer, but fundamentally your way more than comms. And so if you have like, you know, my point of my chief comms officer is incredible at getting like extreme consistency and productivity out of our team. Well, that's something we kind of need in product and then as well. And so like, how can she, you know, go help with that type of skill set across the company. And so I'm really trying to get like some of these superpowers and get all of these execs to apply their superpowers outside of just their function or which pushes them to work better together, spend more time on company wide problems instead of just having their legs, a heart of their function. And create, I think, a lot more resiliency in the business. So, yeah, that's kind of how I do it.

I like the analogy of the bouncer. Have you ever scared anyone off that wanted to join when you sort of gave the reality of a company?

Absolutely. And that's a good thing. Yeah, I'm glad I scared them off, because when they come in, I'd rather know up front.

Okay, well, let's talk about a new initiative you just announced last month, for instance, Instacart. It's called Instacart Health. Would love for you to give an overview of that. You're trying to improve people's access to nutritious food. It's a social good you're pursuing here. And I want to know, how do you balance investing in a social cause at this time when you're also trying to balance shareholder wishes?

Yeah, I think the way you frame the question of balancing these things out almost assumes there's a tension between the two. But I actually believe that the best way to do social goods in the world is to have a business, a core business, a way you make money that's aligned with good outcomes in the world. And that's really important because, you know, if you have this, like, you know, corporate social responsibility initiatives, social good initiatives, kind of on the side for PR reasons or whatever, like, you're never going to invest as much to solve that problem than if it was your core business. So if we take the example of Instacart Health, what is it that, you know, at the basic level, it is making sure that people get more access to nutritious food, they can make better food choices that support their health, and enlisting the healthcare industry to help make that happen. You know, at a very high level, all of that is like a massive social good, because I believe that America's biggest health problems are actually food problems. So if we solve that massive social good, but it turns out it's also massively impactful for our business because that will mean we're delivering a lot more food to people. And so, to me, I never want to be on the extremes of, like, you know, thinking of these things as decoupled. It needs to be that, like, your core business needs to have a positive impact on the world. Otherwise, you know, why are we all doing these companies? And because it has a positive impact on the world, you're going to invest more in that social good outcome than if it was something just on the side.

Yeah. Great. We have a few minutes left. So I wanted to give the audience a chance to ask questions. So is there anyone with a question for Fiji? Thanks so much for doing this. Just a super specific question you mentioned in passing. These leadership dinners that you host, can you just say a little bit more about what that is, the frequency, how you use that?

Yeah, absolutely. So I do dinners with my management team about once a month, all in person, when we're very much working remote these days. But I try to bring the whole team in person because I still believe that, you know, personal in person connections do matter until Mark solves the metaverse. And so I try to do that once a month and then I bring a larger group of leaders. So things like the VP group together kind of once a quarter and like this is a much larger group where we have kind of a different programming. But the main thing that I try to get right in these dinners, especially with my leadership team, is not make them entirely about the work and like the issues at hand, but make it about like the craft of how we're working together, the craft of operating. And so we end up sharing a lot about, like, best practices in each team, like challenges that we have, but not about the business challenges that we have in terms of operations. Operations and how like my leaders can help each other. And that's really a moment where like, everybody is vulnerable. And I set the stage for like, you know, vulnerability being okay in like sharing what they need help on. I share what I need a lot of help on as well. And that's really a moment by which we kind of figure out how to help each other out.

Any other questions over here?

I have a very specific question too.

So what's your best strategy to swap.

Out a manager of a sub team? We are a seed stage company transitioning into csa. We're such a small team. When you lay off the manager of the sub team, it's a big hit to the entire team. So I want to hear what's your opinion about that? And I'm not sure that the answer to all your question, but I do two things. I really try to use these moments as an opportunity to put an interim manager in place that I think has potential and stretch them into the job and give them a little bit of time, like a couple months to see if they can actually do it. And you know, I have actually been very surprised at the number of times where we would look at it and be like, yeah, this person's clearly interim. They're not going to like, be able to have the job. And in fact, like, they're so Excited at the thought that, like, it's a stretch and they could actually deliver. And that's, like, unforeseen opportunity for them that I've seen people really shine and, like, that's kind of the best culture you can create in your company, like betting on your talent and giving them opportunities to stretch. And so I tried to do that a lot. And then during that time, I am also very transparent about the fact that we're going to interview externally and assess the market. And I think this is also a good time for you as a leader to calibrate on, is there external talent that is actually better suited for the stage of the company because you might have scaled, you might have different needs, and it's a good time to rethink what that team needs. And so the combo of these two things results usually in, like, you making the right decision because you still have all of the market context, but you're still, like, you know, making a bet on someone.

We have time for one more question from the audience.

So following up on the management and.

Leadership, what are the key things that the best managers and leaders that you.

Work with have or like, said another way, like, what are the things that we should train our teams in developing so they become great leaders and managers?

Couple things. One is they're incredibly good at sharing context with their teams so that their teams can make the best decisions. And the failure mode I've seen is like, you have the two extreme of, like, micromanagers who are, like, in the details of their team's decision, and we know that's not good. And then you have like, kind of the ends of ones. So one in the middle. That's like the sweet spot, is like really being in the weeds in terms of, of the context you share, not the decisions you make. So that you are able to, like, get your team to constantly tie back to the overall objectives of the company. And you become a pro at trickling down the right information and really enabling the team. So that's really, really important. The second thing that's obviously very important is figuring out how to clear roadblocks and add value to a team. And again, like, the best managers find the right balance between having enough information from their teams but also adding value in each meeting. So, and I hold myself accountable to that standard. For example, like, when I ask teams to come in for a product review, like, I know that the bar is not just, like, they're informing me about what's going on. The bar is, I need to add value to that team because like, they just spent a couple hours preparing for that thing. And I communicate that very clearly to all of the managers. You're getting your team to do work for you. They need to see the return on that work. You need to be a multiplier of the team's impact. And so that's also a really important mindset shift because so many managers, especially early in their career, think, like, the team works for me, they enable me. It's like, no, no, no. You enable them. And when they do work for you, they need to see the roi. And so that's also really important. And then, then the final thing, which is kind of related is like, I always judge on, like, did you make each individual in the team better? And, you know, it's not just about having like a career conversation once in a while, like, checking the box. It's really like, the best managers I've seen have taken people where, you know, you could see a little bit of magic. Back to my prior framework, could see a little bit of magic, but it hadn't been unleashed in the company quite yet. And the best managers figure out how to. To spot that magic, combine it with the right product and what the company needs, pour fuel on that, support it, and then create stars. And that's a very different thing than what most managers think about as, like, oh, I'm just gonna have a career conversation and tell them how to get promoted. It's like, no, no. It's your job to figure out how to unleash that flame in people.

So we have just one or two minutes left. I wanted to ask you two quick questions to close out out. The first is about your experience with Shopify. So you're on the board of Shopify. You've been on the board for some time, so you've got to interact with Toby, who I think is one of the most incredible entrepreneur turned CEO of large public companies. Are there any learnings, quick learnings from interacting with Toby and his leadership style or the company itself that really have stuck with you?

Yes. The biggest one is that they do everything from a first principle standpoint. And I know that sounds basic, but until you see it, it's like so striking. So, for example, when it comes, they were public about rolling out a completely new compensation system. And it was so interesting to see that process because at no point did they think, oh, what are all of the other companies doing so we can follow the trend they always start from, what does our own company needs? What do all people want? And what is going to best solve the problem, even if that means kind of reinvent how comp is done, which is really interesting. And they do that kind of across the board, like how they run their finance team. And initially when I arrived, I was like, that seems like a lot of work. Sometimes established wisdom is nice. And the reality is that they have created a very unique company and they need very unique solutions to enable that company. And they have also, as a result, attracted people who constantly question the status quo and want to redefine, like, their function, redefine their scope. And it pushes them to be better every day through constant iteration, constant improvement, and never assuming that there's a right answer to anything, but always assuming that every day there's going to be a better answer and they're going to go after it, which I think is, like, really just fascinating.

Yeah. And you can see that in their products and the way they run the business. Last question for you. If you could go back to 2017 and, and talk to Fiji in 2017, what advice would you give yourself?

Such a hard question.

Tell Mark not to do the Metaverse. Joking.

It's a lot of billions. It's so interesting. I grew up in the south of France in a family of fishermen, where I was the first one to ever graduate from high school. So I clearly was not destined to be here. And I kind of thought that I was really following my own path and my own, like, you know, unique bend. But when I look back and I think about, you know, five years ago, I was still kind of playing the typical game every one place, which is like comparing yourself to, like, other people competing with other people. And since then, I've realized, like, like running your own race and being insanely competitive, but not against other people, but against, like, what can be the best version of yourself, the best version of your company is actually so much better because the best gift we can give to the world is to really unleash our own creative power. And I believe that if you're so anchored in comparison and competition, you're gonna miss out on the thing that really makes you unique, on your own creativity. And you actually see companies that, you know are so focused on competition end up losing because they're just constantly trying to, like, catch up instead of playing to their own unique difference. Obviously, the other extreme, where you completely ignore competition is also not good. But I think, especially in Silicon Valley, there is such a race to be just, like, a little bit better than the other guy, instead of really carving out your own path, unleashing your own purpose, and the purpose of your company that, you know, that's probably the thing I would tell myself five years ago.

That's great advice to end on. Well, thank you very much, Fiji, for coming today and sharing your wisdom. Give her a round of applause.

Thank you so much, everyone. Thank you.

That concludes this episode of Gray Matter. You can watch the video of this interview on our YouTube channel and you can read an essay of the highlights on the content section of our website, greylock.com blog. Both links are in the show notes. And if you aren't already a subscriber to Gray Matter, you can sign up wherever you get your podcasts. I'm Heather Mack. Thanks for listening.

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