He Sold to Amazon for $500M and Walmart for $3B, Now They're Tackling Food

Hi, it's Tony Robbins. Welcome to the holy grail of investing podcast.

Burgers and barbecue. Thai, Mexican, Italian, Middle Eastern. Every cuisine, high quality food, all in a single delivery.

I'm getting hungry. As a result of this conversation, you're.

Going to hear from two incredible minds, people I consider friends. Tony Florence, the co CEO of venture giant NEA and serial entrepreneur Mark Lore.

How did you have the vision for this business?

No gas, no flames. We can cook a steak in six minutes to perfect temperature. Three people can manage 30 restaurants.

The big brands and food are wed to certain thinking. Legacy technology.

How big does this need to get to get the return that you're going to demand for your investors?

Mark and I'll accomplish something that no one in the world can actually accomplish.

This is everything I've been working my entire career for.

How do you identify the entrepreneur who's right versus like, dude, you got to stop bouncing around.

A lot of it has to do with people overestimate the risk of change.

When you say it, it sounds so easy.

Success after success. It doesn't happen because they're just gifted people.

That's what I fall asleep to. What do we do? We're going to die. What is the play here?

Mark is one of the most innovative business leaders of our time. He started with a company called Diapers.com a company that took on the biggest players in E commerce and ended up selling it to Amazon for half a billion dollars. But he didn't stop there. He went on to create Jet.com, one of the most explosive e commerce brands of this decade, which he sold at Walmart for over $3 billion. And now he's back at it again. His latest venture is Wonder. It's set to revolutionize the way we think about food, dining and delivery. This conversation isn't just about business. It's really about vision. It's about taking risks. It's about innovating and building something truly extraordinary. I know you're going to find this episode both fascinating and deeply inspiring. So let's jump in.

Welcome to the Holy Grail investing podcast with Tony Robbins and Christopher Zook, joined by my partner, CAS Investments, Mark Wade. And have two special guests today. Tony Florence, co CEO of nea, and Mark Lore, serial entrepreneur, founder of Wonder. So, gentlemen, thank you for being here. We're really glad to have everybody. We're going to have a lot of fun and we're going to talk about a lot of different things. We have two people with very, very different backgrounds. So for the audience, we're you know Tony Florence, if you'll start us off, tell us a little bit about your background, how you got from where you were, you know, short answers but give us the idea of okay, well how did you end up in the seat where you are today?

Well, thank you Christopher.

It's great to be in front of everybody and amongst friends here. I'm co CEO of NEA as Christopher mentioned, which is a large venture capital growth equity firm. And you know my origin story is simple. I grew up in Pittsburgh so I'm a lifelong Steelers fan which is the most important fact to get on the table. But in addition to that, after college I went to Morgan Stanley and I ultimately ended up running tech investment banking. But through that experience I got to work with, you know, very large scale companies and very emerging sort of, you know, early stage companies that, that had an ambition to become large and that was the funnest part of what I love which was like finding young companies and sort of helping them become big public companies ultimately. And so I was very fortunate to have the opportunity to transition over to NEA about two decades ago. So I've been in NE for two decades now where we've seen obviously a lot of change in both the industry and our firm. And I've been focused from an investment perspective the whole time around 10 techno, the technology sector which we can talk about and ultimately am now go which means I'm responsible for the, for the organization.

Gotcha Mark.

Yeah, so you know I, ever since I was four years old wanted to be a farmer because they grow stuff from nothing. I was born with this sort of entrepreneurial DNA. Did every business you could think of as a kid from baseball cards to car washes to lemonade stands and everything in between. And you know, I parents had me when they were 20 years old, grew up in Staten Island, New York, didn't have any, any money or anything and so couldn't really go and do a startup you know after college. So I went to work in the back office of Bankers Trust and wound up staying in banking for about six and a half years. Saved some money and then one day just decided that's it, I'm going to be an entrepreneur. Walk to my boss's office and said I'm quitting, I'm going to be an entrepreneur. And he laughed at me and then he realized no, he's serious. And he was my first Investor, put in 50,000 to my first company and that was back in the late 90s and it's been serial entrepreneurship startup after Startup since then. And now I feel like at wonder. I'm in sort of the prime of my career. This is everything I've been sort of working toward and look forward to talking about it today.

Well, I'm curious for you gentlemen. You guys have been in business together for quite some time now, right? I think it goes back. Is it, is it as far as a decade? Do I have that right?

You know, Mark. It's longer than that. It's Mark, Laura and I have been doing this for almost 15 years now together.

Yeah, that's right.

So I'd love a story like that that, you know, you hear about. Unfortunately, so many partnerships that don't, that don't last that long and certainly don't have the success that you guys have had. How did that all get started? I mean, how did you guys meet and, and what bonded you together other than just making your first investment? Cause surely there's something outside of that, given the kindred spirits you are.

Well, maybe I'll start and some of this will be a bit of a memory lapse for Mark Lorre now. But I'll dispel one myth, Mark and Christopher, which is that those with money can kind of invest where they want. We have to, at NEA and venture capital, we have to chase the best founders and entrepreneurs. And so it actually took a couple cold calls into diapers.com and ultimately getting routed through customer service and then eventually to the founder, CEO Mark Laurie, to, to ultimately make the connection. And really I just been hearing a lot about Mark and about the company and, you know, was sort of fascinated by this and it was just serendipity that, that, you know, at the time I was just recently had joined NEA and had just been hearing great things about it. So I chased Mark actually for that first meeting and Mark ended up@diapers.com being the first investment that I made at NEA. And obviously now we're on the third experience with Wonder over the last 15 years or so. But in any event, that was sort of how I got in front of him and then fortunately he didn't kick me out after that first meeting.

Well, I mean, Mark, that's a fascinating situation because most people think that the people who have the gold make the rules.

Right?

That's the old saying. And the reality is in the venture world, in the growth space, a lot of times it's the people that want the gold that actually get to make the rules. And so in your situation, what did you see in NEA and Tony Florence specifically that Made you say, okay, this is somebody I want on my cap table. This is somebody I want to actually help me grow my business.

Yeah, I mean, I'll say, you know, Tony is one of those extremely rare venture investors who is not only, you know, entrepreneur friendly and thinking about the best interest of the entrepreneur, but he's also a big visionary thinker himself. And so I really like that as an entrepreneur, someone who really understands the big picture, the vision and how big something can be and wasn't afraid of how much capital it required to get there. He was more focused on the size of the prize, which again is rare. And I think also Tony has the unique ability to think beyond just the current company, but think about the long term relationship. And so as I give you a great example, I don't know what other investor would do this, but after we had a success@diapers.com and we all made a lot of money and it was great, I took some of that money and invested in a startup that Tony had recommended. It was my sort of first venture investment myself. And six months I think into it or something, Tony's like, hey, this probably wasn't the best company for you to be your like first company. And I put you in this and so I'm taking you out. And he did and it was unbelievable. You know, I couldn't believe it. But he was thinking, you know, ahead to the relationship with me in the future and also just being a good human. And that's what I always love about Tony and why he was the first call for jet.com and the first call for Wonder. So.

Well, I'm curious. Maybe let's spend some time on Wonder because I know that's the current big project and it's, it's really a game changing type of company. How did you, Mark, have the vision for this business? What prompted you to want to, want to start this, this, this in this area, this blending of technology and food? Right, these. In many regards, this is what our days revolve around. I know for me it does, especially with little children. It's like kind of one meal to the next. So maybe share how these things came together and in particular the partnership with Tony.

Yeah, I'll tell you the origin story. The vision has evolved a lot since then and it's even bigger than it was when it started. But the original thesis was food delivery was exploding around the world over the last decade. People were paying a premium for convenience like never before. People weren't cooking, they were accepting a very bad delivery experience. Cold Food not on time, high fees. And yet the business continued to grow. We had two companies in this space approaching $100 billion market cap in food delivery. And I see the net promoter score is basically negative and thought, wow, there's a big opportunity here to disrupt this space by vertically integrating, by not only being the delivery platform, but also owning the restaurants and cooking the food. And so that's, that's what Wonder does. We own 30. We have created or own 30 different restaurants across every cuisine type, from a high end steakhouse to Spanish tapas, to burgers and barbecue, Thai, Mexican, Italian, Middle Eastern. Every cuisine we've got a restaurant that we own. And we spent the last six years trying to figure out through culinary engineering and food science how to cook all 30 restaurants in a single 2,800 square foot kitchen with no gas, no flames, no hoods, very lightly trained folks in the kitchen and be able to deliver really high quality, consistent food over and over again. And that enabled us to basically create a delivery platform where you can order from 30 restaurants and get them all in a single delivery if you want. Coming hot, fast, on time at a quality level that you don't typically find in delivery. So that's where really Wonder was and started as a vertically integrated food delivery platform. Owning the software, the delivery experience and owning the restaurants and cooking the food. And that's how we started. We can sure talk about it later, but the vision has grown quite a bit since then.

I do want to come back to that in a minute, but right now I'd love to hear from Tony Florence. So Tony, people think of nea, they think of technology primarily. Certainly Wonder fits into the technology bucket, but it's a food service business. At the end of the day, the technology enables that. How is it that, I mean there's an old saying in venture and in growth, it's really, in many cases it's more about the jockey than necessarily the horse. It's very much who's actually going to lead that company. And so clearly mark lore had jets.com and diapers and the other thing that he's done to be massively successful. But what made you say this concept with this entrepreneur would work?

Well, look, I mean, I think sir, you know, Mark is kind of purpose built for this opportunity in many ways. If you think about what he did at Quids, which is a high frequency, you know, very, very high end sort of customer service led e commerce business transaction. Business Jet was more on the commodity side ultimately I think, but both of those were extremely operational intensive. And I think what I got excited about with Mark was very simple. Look, Mark's one of the best founders that we've ever worked with at NEA and certainly for me in my career. But he also sort of, I think, can not only paint a really big vision, but has a unique complement of being able to sort of like be obsessed about execution. And so very early on, Mark had a very clear vision, but also a very specific roadmap on sort of how this would sort of be built out. And, and you know, like a lot of great like founders like Mark, you know, make something extremely complex, simple. Which is to say that you've got a category that's one of the largest in the world, which is food is the. One of the biggest laggard adopters of technology with a consumer population that has high frequency. Every single person in the country eats two to three times a day, sometimes four times, like I do. It's an extremely big part of the kind of the wallet and the spend. And by the way, as Mark said, there just hasn't been a lot of innovation. And so when you marry that with what Mark sort of had, which is a business model being vertically integrated, which is a big innovation with the food science part of it, we just felt like this was sort of purpose built for Mark, but also that it could be a really big company. And what we didn't know, but we had an inkling with Mark, was how he would use machine learning and next generation logistics sciences and data science and ultimately AI to really power what is an extremely kind of unique customer experience. And I think we had seen this before with Mark. If you look back under the hood at Diapers, which became quidzy or jet.com but it was really fundamentally a lot of software technology that enabled those. And so Mark has this ability to be obsessed with the customer experience. So in the end we're delivering food and somebody's got to love that food enough to order it the next day. But to get to that, you know, really is grounded in hardcore technology. And the benefit of this is that there was a clean sleeve of paper. If you think about the big brands and food that, you know, today, they've all been doing it for a decade or two or three, right? They're wed to a business model, they're wet to certain thinking, and they're also wed to certain sort of technology, legacy technology. And so Mark had the advantage of being able to modernize and everything about this in a way that, you know, he can now accomplish something that no one in the world can actually accomplish because of technology.

It's fascinating because. Going to digress just a second. But Mark, this sounds almost exactly like the conversation we had recently with Jason Ballard from icon. You know, Icon, for those that don't know, is 3D printed home company based in Austin, Texas. We were very blessed to be seed investors in the company and they have gone on to become really truly changing the game when it comes to how homes are being built. Because they will build a home with a 3D printer. Literally. That is true. Go, go to YouTube and look it up. Watch Icon build a home with a 3D printer out of concrete. And he basically was talking about how taking the legacy way in which we were building homes, which is effectively the same thing we've been doing for the last 50 years, not much has changed.

Thousand years.

A thousand years.

Sticks and bricks.

Sticks and bricks. Still, that's true. And now using technology, AI, machine learning and other things to be able to completely revolutionize an industry that just was very wed, to use your term, Tony, to just the old way of doing things. And so it's fascinating to see that.

Hey Mark, I'm curious, can we take a deeper dive into the food science component of this? Because I think for a lot of people, they think about food and it's a basic thing. It's something that they're very familiar with because they interact with it every day. Maybe like yourself and you fancy yourself a little bit of a cook and you like to cook. So how is how I'd love to learn a little bit more about what the technical side of all this looks like and what goes into everything you just said about bringing 30 different types of restaurants into one. Did you say a 2800 square foot kitchen?

Yeah, 2800 square feet, which is.

Yeah, yeah. And then, and then getting it out the door so that, you know, I was just thinking about this the other night of like, well, if I'm going to order food, I don't order a steak from one of the nice places because I know it's going to come cold, I know it's not going to be the same experience. So I totally eliminate that kind of a cuisine from the opportunity set. But I mean clearly you guys are onto something here.

So I'd love to learn 560 unique meals that we can put out of that kitchen. So it's set up a little bit like a micro fulfillment center in that there's a conveyor, there's a semi automated expo area, there's one hotline so off peak Hours, let's say at midnight, with volume low, two to three people could actually manage all 30 restaurants. So it's really systematized. We can cook a steak in six minutes to perfect temperature, seared on both sides perfectly without a flame. We can cook pizza in 90 seconds. We can cook pasta without water. We can cook wok, stir fry without a wok. You know, we've just kind of invented new processes and new ways of cooking food to replicate the quality with incredible consistency. All from, you know, fresh food cooked to order. So nothing's frozen, nothing's reheated. Everything is finished in the kitchen. But it's just been six years of iteration to get it here.

Is there one? Is there, like, a technology at the core of that that allows you to accomplish those things? I mean, those are very different cooking techniques. I mean, I suppose searing a steak, it could be like, you know, cooking a pizza, but that's a very different than cooking pasta without water, which I didn't even know was possible.

But yeah. So every single item has a different process, end to end.

Wow.

But we purposely tried to limit the pieces of equipment that we have inside the kitchen to reduce complexity so that we can get consistency. We're able to easily train people, fit it in a smaller space. If we literally had the same equipment that all 30 restaurants had to produce that quality food, we'd need 20,000 square feet.

Right.

And it would be millions of dollars of equipment. So how do you do it in 2800? Really, the magic of wonder. That's the invention. We feel like we've really invented something. We also built all our own software inside of the kitchen, like the whole KDs and everything. So it's paint by numbers. It's all. If you order from five different restaurants, all the items are sequenced to finish at roughly the same time. It's timed with the courier, since we do the delivery. So we know exactly when the food's gonna finish and the food doesn't sit in the kitchen. And we set a tight delivery radius of 6 minutes in the city and 10 to 12 minutes max in the suburbs. So you're getting the food hot because it's not traveling far and it's not sitting long in the kitchen because it's fully vertically integrated. That's really the magic. It's more on time because we know exactly where everything is and it's accurate. We also use computer vision in the locations to make sure that all the items that you order are, in fact, what goes into the bag. So that's some of the magic.

How many locations do you guys have today and where are you? Just for those?

Yeah, we have 40 locations open now. We opened the first one two years ago. We'll have 100 locations open in about eight, nine months from now. So we're starting to open more than one a week at this point. We have 15 opening in the next 10 weeks. So starting now we're starting to expand. Where we've been in the New York metro, we're going to Philadelphia next week and then Washington D.C. later in the year.

But it's not, it's not, not this.

When do we, when do we get Houston? Houston's a, Houston's a great.

Year's out.

We are a foodie town, actually. Got a lot of great cuisine here in Houston. Tony, Florence, let's talk about the economics and the business model here. When I hear 35, 40 restaurants going to 100, obviously that's a lot of capex, a lot of growth that has to be handled, a lot of logistics, that kind of thing. How big does this need to get? I don't want to get into specifics, financials, things of that nature, but how big, how big does this need to get in order for a firm like NEA to get the return that you're going to demand for your investors?

Well, look, I mean like the progress that's been made is incredible. And by the way, I'm just like, as Mark keeps talking about steak and pizza, I'm getting very hungry so I can't wait to get off of this. I fortunately live in New York so I can go order wonder. But you know, like a lot of what he talked about, you know, really plays out in the financial physics of the business, which I'll come back to. But I think number one is that the customers are obsessed over the quality of the food and that leads to a high NPS and high repeat rate. Secondly, the customer is obsessed over the fact that we've got really significant delivery time advantages relative to any other alternative. So we've got an ability to really lean in on that. And then lastly, choice. I remember this is by the way, a 15 year lesson that I've learned with, with Mr. Mark Lore. Like selection matters, choice matters for customers in any business. And so I think like the fact that, you know, Christopher, you can go on wonder if you're here in New York and let's say you're with three of your partners and one of you can order from the steak restaurant, the other from Brique, the other from Italian, all from the same Restaurant all delivered in the same beautiful wonder packaging with the same value proposition around food quality, heat, temperature, everything else. It's an extraordinary experience that, that generates again, high loyalty, high frequency. So the financial physics are actually advantaged by a lot of what Mark is talking about in addition to that at the unit level. Like the one thing that, that I love about the way Mark thinks is he doesn't necessarily break from traditional laws of economics on the business. Like the unit level economics are really best in class. And that's because we can have higher throughput, ultimately higher revenue per box relative to sort of competitors. And in addition to that over time, like a better payback ratio, time to payback and ultimately better contribution margin. The other thing that Mark sort of again, he drops little crumbs. You guys have to follow in this storyline, you know, with two or three people working out of wonder compared to if you go into a normal place, there might be 5, 10, 15, 20 people. You know, ultimately the labor advantages that they have are quite significant in addition to all the other line item advantages. So the contribution margin and ultimately the EBITDA margin of the unit level is you know, again, sort of best in class. So you know what we think where we are now after years and years of like the hard science, the development, the vertical integration and now we've proven out the early cohorts, we're in a position of rapidly scaling and so we're really excited about that. And while look, it takes a little bit of capital, the return on capital right now for the next kind of, you know, 25, 50, 100, 200 units is really going to be best in class because you know, we've got. And then the last thing is like, which again, you know, not coming from this industry, I've sort of come up to speed a little bit, you know, after our initial beta Mark and the idea is that site little things like site selection, like you'd be shocked at like how hard it is to go into Houston, Texas and you know, you don't need permits for a wonder because you don't have, you know, a lot of the venting and all the other things that get stuck into a lot of the permitting processes on a local basis. So we have ability to have velocity of growth because of the financial physics, you know, because of the kind of the core advantages at the unit level. But then also because of our site selection model, you know, that that allows us to kind of grow at a, at a faster clip. So if you look back and you look at the other sort of like comparables, if you were in the restaurant industry, our ability to open 25, 50, 75, 100 in 6 12, 18 months is far advantaged because a lot of these financial advantages, but also some of the other things underlying the model.

Well, I mean, in every single restaurant ever, it's all about managing, you know, your food cost, your labor cost and your occupancy. If you handle that, everything, everything else, for the most part, will take care of itself. And the interesting thing about what you talked about is from a scalability perspective is not having to go through this long permitting process that a traditional restaurant would have to go through. Because having watched a lot of businesses over a long period of time just kind of struggle with being able to scale because while they think it's gonna take two months, it ends up taking four months for something they have no control over whatsoever. So not having to go through that, you know, that process is obviously very, very valuable. So when about as a business mark lore, I mean, the exit strategy is all the old saying, begin with the end in mind. The situation here. Is it to build it and sell it to strategic, Is it to take it public? What do you see? And obviously you never know for sure, but you've got to have a target. What do you see as the exit for something like this?

Yeah, I mean, I see this as a multi generational company over the, you know, next coming decades, even the next century. So yeah, that, that'll have to go through an ipo. We're not, you know, focused at all on an exit through sale like the last two times. This is, this is everything I've been working my entire career for. I think this has the chance to be a, a massive company and have a real impact positively on, on, on the world.

I, I think that's wonderful and I love to hear you say that. Sorry, no wonder, pun intended. But the, the A chord with me. You know, anybody can look you up and know that you do not need to do this. This is, you've had a lot of success in your career. I know you're a serial entrepreneur. I know that you, you know, are, are an athlete. You just, you, you're driven and I love that. But at the same time, why keep doing this? Why risking large amounts of your personal capital and the most valuable asset you have, which is your time to do this. What is it about this that just makes you say this is what you've been built for you your entire life?

Yeah, I mean, first of all, I just love building companies. So, you know, some people you know, love, you know, their hobby. This is like my hobby and my work. You know, I love it. I love building something from nothing. But I think this business in particular has the chance to make a really big impact on the world through, you know, both food and health. And so, you know, one of the things that we're working on, you know, as we're continuing to build out this core business, we're also thinking and innovating for the future. And we talked about Wonder, the core business, the first party business. We also bought Grubhub and Seamless, which will bring 375,000 local restaurants onto the Wonder platform to be able to provide both first party and third party delivery. We bought Blue Apron, which is a meal kit company and in the future, eventually grocery and reservations so that it is a true super app for mealtime. All the different ways in which you eat you can be done through the Wonder app. Now how do you keep these commodity business connected in a way that makes somebody want to do groceries or do local restaurant delivery or meal kits, Everything all through one app. It's really data and building a moat around it. With AI where it starts with your health, we understand your biomarkers and your health diagnostics, we take your oura ring data, whatever wearable data, understand your food preferences and eventually get to a place where we can feed you autonomously according to your health goals. Because we've got all the ways in which you eat. So think breakfast, lunch and dinner. AI knows the foods that you love, know your food preferences and is able to not only recommend the meals, but also then deliver it. You go out to a restaurant, you make the reservation through Wonder, we tell you what to eat off the menu, you like to cook, we'll send you groceries and tell you what to make for breakfast, lunch and dinner. But again, all according to the health goals that you set because we've got all your biomarker data and sleep data and exercise data and all the rest. It may seem far fetched, but I've been eating the dog food for the last year. I'm now 90% of my meals personally are AI directed, meaning 9 out of 10 meals I'm eating exactly what AI tells me. I've never been happier because the food diversity is better than I could think of myself. I score every meal, so now it really is dialed in and knows the foods that I love. And best of all, it's improving my health without me even having to think about it. So that's something we want to eventually long term bring to the masses. Even if somebody was only cooking every meal, imagine seeing sending groceries and just saying, make this for lunch, make this for dinner, make this for breakfast, and being able to make perfect, efficient use of your groceries. Because AI knows exactly what was sent, right? So that is the bigger vision that we're working toward. But again, you have to be able to walk and chew gum at the same time. So while we're innovating for the future, and that is years away, we're also laser focused on the core business and building this incredible vertically integrated delivery platform. So we're kind of, you know, doing both. And I think from an organizational structure, it's important, you know, to segregate that into like a separate subsidiary unit where the same people aren't working on both so that there's no risk of distraction from the core business.

I mean, Christopher and Mark, you guys heard a little bit of a masterclass from Mark Lori on sort of that duopoly of thinking. I mean, this is what we love as an investor about Mark, right? I mean, I'm just thinking like literally off the top of my head yesterday, you know, whatever 8am I think it was, I got a call from Mark and he's telling me about some orders that came in over the weekend around how they were able to deliver, you know, $1,000 of food and, you know, 75 orders in like 17 minutes and the NPS score and, you know, everything in the afternoon. He's recruiting, you know, like an all star sort of for a part of the company, which is one of the really great things that Mark's done, which is team building, which is really important. It's not just about Mark, but the whole team. And then last night I get an early look on a video at 11 o' clock on this AI app he's talking about. But I think it really does take all of that to continue to do and excel and build and grow at this breakneck speed. And I also think it takes that level of obsession to kind of win a game of inches during the day and kind of think ahead 1, 2, 3 years out on what the vision of that experience could be, that none of us really need to think about what we eat every day, but wonder fulfills it almost automatically.

I'd love to maybe learn you guys are talking a lot about where you are today and even what the future is going to hold for the company. But you guys have, you know, the company's been around for seven years or so to this point. I'd love to learn how that strategy and that vision has evolved over time. Right. Because Mark, you've made a couple references to the fact sort of how you started and what you were focused on then versus where you are today. Those are two different spots. So I'd love to maybe have you guys share that history together. And Tony, what your involvement was as a board member and that sort of thing.

Yeah, yeah.

I'll let Art go through the details. I mean, we were there at the beginning when he had a piece of paper and a vision, and we're here today, so I'll give you my lens on that. But Mark can kind of talk you through his evolution of his thinking, for sure.

Yeah, I think the big vision hasn't changed, but I say the strategy definitely has. And I'll sort of walk you through it. I think this idea of vertically integrated food delivery platform, owning the restaurants and owning the delivery hasn't changed. But I think in the beginning we thought rather than cook and then deliver, what if we delivered and then cooked. So we basically built this technology inside of the back of a Mercedes Sprinter van. You'd basically order from your restaurant, you drive to your house and you'd be able to cook it really fast outside your door. High quality, so that the heat is on it. There's zero delivery time. And we thought that was super innovative. We had to invest in all this technology that we're now using in the brick and mortar to be able to cook really fast with limited equipment where the driver had to cook. So we had to dumb it down so that, you know, anybody can do it. There was no training necessary and I think that paid huge dividends in the future. Trucks were working really well. Customers loved it. But we also tested a brick and mortar because there were some distinct advantages. Namely lower capital can a much bigger tam with the brick and mortar because we can go into urban and even ex urban areas. With the trucks couldn't go, we had lower labor. We offered customers the ability to do multi restaurant ordering because we had all 30 restaurants in one location as opposed to one on a truck. The big question mark was can you replicate the quality from a brick and mortar and drive it to somebody's home? So we set a really tight delivery radius. We found out what's the radius that would really make the customer value proposal similar to the chucks. And we found that this magic number is like 10 to 12 minutes. If you go over that, it starts to degrade. But if you can keep it tight and now have the food sit, we actually proved that we can get similar scores so this is like one of those situations as an entrepreneur where you're digging for silver and you find gold, what do you do? It required a very swift decision. We couldn't run brick and mortar and trucks at the same time. So we made a decision in late 22 to stop the trucks on a dime and put all of our focus and all our best people on brick and mortar. And I think looking back now, it turned out to be a great decision because, you know, the TAM is much bigger, it's much more profitable, the growth rate is there. And in the last two years, we've been able to open 40 of these units. And that's something you need to do as an entrepreneur. You always have to be looking at all the information every day and be truly objective about. If you had a clean sheet of paper, what would you do? Knowing everything you know, up to this very point. And you have to have the, you know, the ability to recognize that and make tough decisions. You know, I say take risk to reduce risk. I think a lot of people just in general in life tend to underestimate the risk of the status quo. Well. And overestimate the risk of change. And that's something you have to fight every day.

I love that. Mark, Mark, It's. It's something to. Where I love the way that you put that is because so many businesses that we've watched over, you know, my 30 plus years of investing, it is literally just amazing how many people say, we just don't want to take the risk because of the fact that we're doing fine. And then ultimately they don't realize that they're being basically disintermediated in whatever way it is. Whether you talk about Eastman Kodak or, you know, Blockbuster Video and all the stories that are so, you know, prominent out there, where people just don't realize that they're being destroyed. They just can't feel it yet. You know, it's. It's. It's amazing to think about how many companies would benefit from that psychology of knowing what we know up to here today. Blank sleeve, sheet of paper. What would I do if I was starting the business from scratch? But that is so hard to get across an organization that, to use the term from earlier, is wed to a particular, you know, way of doing things. And so I just love that aspect of it. But that's got to be hard to help your culture understand that, because it can cause you to have to pivot. You know, there's the old saying as well, which is, if it ain't broke, don't fix it. Well, you're saying, no, let's go break it over and over and over again and do something totally different because it's better. How do you drive that through the culture?

I mean, it definitely is one of those things that has to be top down. And I think it's, you know, painting a picture of the vision, explaining the rationale, and then being decisive. So, I mean, you can do the first two, but if you're not decisive, people. People just get confused. They don't understand what the priorities are. It feels riskier to make decisive call, but that's what's required to get everybody refocused quickly. And it feels risky making it quickly because people like to believe that taking your time to make a decision is less risky, but in many cases, it's the opposite. It's not. Making the decision quick enough is usually the biggest risk that you can take. You can take. So I.

You guys sound like you would. You, you would get along in terms of your, in terms of your management techniques here. Just, just to be candid, I'm. I'm thinking so much about the way we make decisions internally at cas and, and how quickly things happen, and I think it catches some people off guard, especially who are new to the organization.

Yeah, the speed, the speed of CAS is a real thing. And sometimes it can be unsettling, which is why I honed in on that. Because, you know, people, especially if they've been used to doing something, it's been successful, they've done it for five years, for six years. Now all of a sudden you're saying, we're not going to do it that way anymore because there's a better way. It's tough.

Well, I'm curious, maybe a question for the three of you all. You know, as I like to say it, there's a difference between, you know, being in a rut and being in a groove, right? And so, like, we don't want to be in ruts, we want to be in grooves. But how do you know when you're. How do you guys know when you're in a rut or you're in a path that needs to change, it might need to change violently versus being in a groove and saying, we have a good thing going here. We've got the tiger by the tail. We need to stick with that one.

Tony, I'd love to hear your perspective because you see so many different companies and so many different entrepreneurs that approach it differently. What are your thoughts?

Yeah, look, I mean, I was just going to say, I remember when Mark called me about this, this evolution of the model. And, you know, those were the, like, what you just heard is exactly some of the conversation we have, which is I was like, look, what is the risk if we don't do this? What's the risk if we do do it? And, you know, I think at the end of the day, you know, one of the things I've always said about Mark, but also, you know, just great founders, is they're great stewards of both risk and opportunity. And, you know, I think, you know, in. In this vine, you know, the good news is like, you know, we've had a couple, you know, sort of iterations with Mark on multiple businesses where we've just got that level of trust. But the truth is, you know, it's. Every decision in the moment matters. And, you know, Mark, you know, is very clinical in some ways about some of these decisions, but he trusts his instinct as well. And so I think at the end of the day, you know, a lot of a Christopher has to like the best founders, whether it's you and your leadership at CAS or Mark and his leadership at Wonder or running an investment organization, the best. You have to live in this duopoly of really leaning on the data and understanding what really matters, what's really going to make the difference, and then also trusting your instincts. And I think those are the things that really sort of matter. And I think bringing the organization along is. Is obviously part of that, but, you know, in some cases, you don't have a choice. Like, I think Mark in this case just felt so compelled that there really wasn't even, you know, a good rationale not to. Not to do this. And it, you know, as it turned out, you know, the good news is he's more lucky than not. I mean, more right than wrong. And so, you know, it's kind of worked out. But we've seen him do this a couple times at each of these. At each of these experiences that we've had.

Yeah, I'm going to stay with you for a second.

I think the key.

Hang on just a second, Mark, because I want to stay with Tony on this, because the fact that the seat that Tony you sit in is a different perspective, because I'm sure you've also seen plenty of entrepreneurs that are always chasing the shiny object. They think they're in a rut when actually they're in a groove. And so they start doing this, that and the other, and they actually harm the organization. How do you identify the entrepreneur who's who's right and is definitely this is the path to go versus like dude, you got to stop bouncing around.

Well, a lot of it has to do with focus, Christopher. So like, I mean I, I think you kind of know it when you see it and a lot of the times that like, like you've got, you know, this sort of goes wrong, if you will. It's been a, it's been a distraction and a level of chaos and disruption that sort of happens that you know, is not focused. And so I think that the key thing is to be end up being very focused on the key couple things that are going to really matter. And I think in the cases where these are, what I quote, successful evolutions, some people like to call them pivots. But these evolutions that are successful, they tend to maintain a level of obsession and focus that really matters because you can't do everything right at once. And so that's really what I think makes the difference between, you know, a world class, top decile founder and CEO like Mark and the ones that, that, that aren't is that ability to kind of stay centered on a focused effort even if you're pivoting a little bit or evolving. Gotcha.

Mark, what were you going to say.

Just to build on that? I think, you know, companies.

It'S not.

About whether or not the company is focused on, it's really about the people, are the individuals, are the executives focused or not. And so I think a lot of it comes down to the nuances of the organizational structure. So for example, with Wonder, AI purposely built a separate subsidiary run by somebody that was recruited from outside the org. Not taking great talent from the org, actually an opportunity to bring in great talent because it was a separate sub sub and that sub is completely autonomous with no connection to the mothership at all. At least for the, for the coming couple years. That's really important because that doesn't. We wouldn't want any person working on the core business to be even remotely distracted by AI. You know, the only person in the company that's thinking about AI and the core business is me, is the CEO and founders. So I think that's really important. I think sometimes people miss that. You know, you can do more if you have the right level of talent and the right org structure.

So I mean basically what I heard is that you can overcome some of that limitation by, you know, sometimes siloing is used as a negative term. And what I hear you saying is it can be used as a very positive term where you Know, you give people their lane and say, go, run as fast as you possibly can. And if you have multiple lanes at the same time, collect effectively. The organization can run faster than it would otherwise run. You know, Mark, to your, to your question, you know, we celebrate our 25th anniversary next year and it's something to where, you know, there's been many times over the years where we have chased what seems like shiny objects. But then ultimately that level of conviction that Tony talked about where it just, it becomes so clear and so absolutely certain that this is a good idea, that it would feel wrong not to lean into it. The good news is that most of the time the organization can feel that conviction. They can feel that enthusiasm and that confidence and that certainty rubs off. And other times it can obviously not. And that is something that's very much of where the science of business becomes art. And certainly leadership comes in quite a bit.

Well, I think, I think in those situations that you guys are talking about these different path pathways, you can go. And Mark, you said it has to come top down. Right? It's got to come from the leadership. Which is, which is similar to what you just said of like, there's got to be a sense of conviction and the organization has to feel it. They're not going to feel it if the leaders don't feel it and the leaders don't push it out. But the way leaders get there ultimately is.

And it's.

Mark, as you were talking, I kept helping, couldn't help but think about, you must have some kind of a framework that you've used to have this success that you've created multiple times with multiple companies. I'm curious if you, if you, if you have a formal framework, is it an informal framework? And if you do have a formal one, what is it? I mean, like what, what, what, what, what are the styles that you use? What are the techniques you use to, to create this type of success and to create this kind of focus? Because it doesn't, it doesn't happen organically. That's not the way people are wired. They're just not going to, they're not going to naturally flow into it. So I'd love to, love to hear your answer there.

Yeah, so I do have somewhat of a formal framework I call VCP Vision Capital people. Each one has four elements to it. We as a leadership team have a meeting called VCP every week where we're just talking about the fundamentals. We're not talking about the day to day business. We're talking under V for Vision is really like all the nuances of where we want to be 5, 10, 20 plus years into the future. The strategy to get there. Again, the nuance is the most important. When you say very, what do you mean by very? Or we want to do it cheaper, what do we mean by cheaper? How cheap? Getting into the nuances. We're all the executives understand the vision and the strategy and all its nuances is so powerful. And when you tie that with an organizational structure that lines up to that strategy. So it's not just a lot of times the org structure's in the people department and it's just very functional as opposed to the organizational structure living under the V. Because you want to have the best people reporting to the CEO, have the accountability for delivering against that very specific strategy that ties to the vision. So you build a structure around the strategy having a capital plan, not just how much capital you want to raise today, but next round, the round, after the round, after that, at what valuation? How much capital do you need to get from one round to the next? And what do you need to prove between now and the next round to I always try to double the valuation and what do we need to do to do that? And then under the P, it's about building a culture that's able to not only attract the very best people in the world, but also keep them motivated and get the very best they've got to give. So that means what are your values? What's your mission? What are the behaviors that you look for in the people you hire? What's the compensation system and what's the performance management system? How do you reward, how transparent is that? And most of the time like, that's like again a people function. But we as a leadership team and all the execs and VCP team go through again, the nuances, these pieces, these foundational pieces to set the right foundation, to be able to leave it to the best people to go execute. That's what you want to do ultimately is everyone knows the vision, they know the strategy. You got the capital plan, you've got the right culture, you got the right systems, put the right people in the right spots, and then the magic happens.

And that's a beautiful way to put it. And of course, when you say it, it sounds so easy. It's just really, really, really stinking hard to actually execute that with these, you know, with real human beings sometimes. But obviously that's what makes great founders, that what makes great leaders as well.

Yeah. Just to build on one more point is that you mentioned before about being in a rut and I've seen big companies do this. You sort of get into that day to day flow, the monthly manager meeting, the quarterly meeting, the annual meeting, you know, the EPS guidance, earnings reports, meetings, and you're just meeting, meeting, meeting, meetings. There's not a lot of thinking. You're kind of just going through the motions on the business. And I think it's super important as a founder that you have to be and spend a considerable amount of time every single day thinking clean sheet, like not in a sort of like day to day pattern. And so I use that time of night when I go to bed every night. That's what I fall asleep to. It's basically reverse engineering, vision, strategy, running scenarios in my head and thinking based on the information I learned today. Anything new, is this the right strategy, is this the right vision? And just playing it out those scenario over and over every single night. And I do think that all that time I spend thinking and I think it's also translates to some of my team as well, that allows you to move much faster. And because otherwise like a strategic, like what do you said, Kodak or Toys R Us or something, it's like, no, they need to be thinking in like 10x speed that they're probably thinking and they're just not spending enough time. You know, it should be like every night, what do we do? We're going to die. We got to do something. We got to figure out what is the play here, you know, and instead it's just filled with all this other nonsense.

You know, Tony, it's, it's, it's fascinating to think about how hard it is to actually execute on that and how few founders are able to accomplish that. Which is why, you know, the win ratio, you know, is hard in the world of growth capital and venture capital. Let's zoom out just a little bit because I think the audience would love to hear your view on where, you know, NEA is one of the granddaddies of venture capital and growth capital that exists. You know, how does this environment that we're seeing today, you know, compare to where we were a year and a half ago when it was a very different environment and obviously compared to 2021, when everything was hot as a firecracker, you know, where do you see the industry going from the standpoint of opportunity, risk and ultimately the rewards on the other side?

Yeah, look, I mean, I think, you know, at nea, you know, look, we've been, you know, very fortunate to be around for five Decades, which means, you know, that we may have what is sort of both navigate and also lean into, you know, lots of that change and evolution, you know, good markets, bad markets, you know, technology cycles, you know, transitions. And I think, look, we. We would say we've never been more excited, encouraged by what we're seeing today. You know, I think that, you know, we, you know, what you're referencing in terms of, like, the last couple years, you know, clearly we were in a capital market cycle that wasn't sustainable. I remember we spoke about this together actually, like two or three years ago, and we both had a very similar sort of, you know, point of view on that. And that obviously governed sort of how we thought about valuations and about entry points and our capital investment and our pacing. And so we feel very fortunate that we're able to dynamically allocate capital based on those, you know, that environmental thing. But in the long run, Christopher, the duration of our outlook and our capital is such that we really invest for the long term. I mean, we invested in Mark's company sort of before 2021, during 21, 22, 23, 24. So we have an outlook. We care more about where wonder is 5, 10, 15 years from now than we do necessarily in the moment. Our job is obviously to live in the moment, to make sure that we're maximizing the opportunity for our limited partners. But at the same time, we have a duration of mindset. And so when we look at the fundamental trends, I remember during COVID and then the onset after the 22:23 timeframe, we were saying to a lot of people, look at periods of dislocation that often creates the best conditions for entrepreneurship. And so we actually have seen that. We've seen that in the last two, three years, the number of kind of company formations and activity has accelerated. Because what happens, one, the switching costs are a lot lower for founders and entrepreneurs to kind of leave big companies, to leave small companies. And then secondly, the good news is that right now we've got underlying technology trends that are secular, like what we're seeing in AI as an example. Some of the things that Mark's talking about, what he's using today, these are fundamental shifts that they're not going to be sort of monetized necessarily today, but they're going to be sort of played out over a long period of time. And AI is a very horizontal thing. We've been looking at this for probably two decades now, back when it was called machine learning and automation and data science and all the evolutions and so what we see here is a really big opportunity. You mentioned earlier, certain industries. Why would we invest in an industry that a company like Wonder that's kind of technically in a food industry. Well, reality is that technology, software, AI in particular, is impacting and driving every industry today. And we think that's just accelerating also. The world has become flat as it relates to entrepreneurship and the way capital can flow. So we're seeing incredible opportunities, you know, outside of just Silicon Valley, outside of New York, we're seeing, you know, really great businesses being built all over. There's some advantages, you know, in the remote world for company formation, talent acquisition. So the conditions are really, you know, exciting right now. And obviously our job is to sort of allocate capital or the best, you know, best opportunities that we can find and be thoughtful about the external environment. But we tend to ultimately focus on what we can control. Christopher which is like the making the right decisions, leaning in on the things that Mark talked about in terms of the things that a company is going to go through, and then ultimately being a really good steward of capital for our limited partners over the long run.

Yeah, it's funny because so often investors will want to talk about, okay, well, this is not a great time to be invested in technology. This is, you know, we'll wait a little bit, wait six months, we'll wait a year. These things take so much longer than people want to admit or want to acknowledge. If you're going to trade the stock market, yes, you can try to time it a little bit more. But if you're going to invest in great entrepreneurs like Mark Laurie and other people like that, in the world of disruptive technology, you have to be investing in the right people at the right time, regardless of what's happening in the overall world. Yeah, I want to transition to just a little bit.

We can add to that really quick. I think how fortunate are we all to, you know, a lot of that value capture is now happening in the private markets, whereas 20, 30 years ago, a lot of it started in the public markets. And so I think that's the other thing that's different now is that we can sort of see the duration of value creation in a very different light, which, you know, plays to the advantages that, you know, cavs may have or NEA and others, and certainly plays to the advantage that founders like Mark have that have access to long term capital that can really build and grow, take risk, do things that you couldn't do, and otherwise just put it being in a private format.

No it truly is a different world in that regard because companies can stay private for so much longer. And obviously it just plays into our big theme of growth of the private markets in general. And one of the benefits of that. I'm going to pivot to another theme and go to Mark on a separate subject. One of our other major themes at CAS is cord cutting and how that is changing the world of consumer behavior. And ultimately, as a result of that, we've gotten very heavily involved in professional sports. So, you know, Mark, you obviously have chosen to get involved in the NBA. That's all over the press. What made you want to be involved in an NBA franchise?

I mean, you know, I was kind of, you know, being a. A incredible sports fan my whole life. But, you know, from an investment standpoint, you know, just felt like the NBA was. Had an incredible future. It was a progressive league, valuations, still felt like had had more room to run. This is back a few years ago and yeah, that was really it.

Well, I think, you know, just. Just sticking on the sports theme, you know, there's. There's a lot of interest that's coming in around that space now, Mark. I mean, are. Is your. Is your aperture fairly tight around the NBA? Are you thinking, is there. Is there a broader theme here that you want to participate in? What's your. Where's your appetite outside of, outside of the deal?

No pun intended. My appetite is wonder. I'm 100 hours a week on Wonder. You asked him about Timberlos and sports. You know, I can't really help you there. E Commerce. I already forgot everything, you know, I've learned. I mean, I'm like all in on this. I don't think there's any other way to do it. But to be 100 hours a week, it requires like, you know, it's kind of like not think about anything else.

No, it's. And the great thing about, you know, the NBA, Timberwolves, etc. Is you'll be able to have great people that are just as passionate about what's going on on the court and in the stands and the fan experience as you have obviously for the customer experience at Wonder. When we think about. As we wrap this to kind of a conclusion, it's really fascinating how two businesses effectively the allocation of capital at NEA and then the backing of founders at NEA does and how they collide with fantastic entrepreneurs like Mark Laurie. It's really an example of how much is happening in the world. That's really, really. And to think about the way that you're able to, you know, I just can't wait to taste one of these steaks that's cooked in six minutes and seared on both sides. I agree with Tony earlier. I'm getting hungry as a result of this conversation.

I want a heads up. As soon as we get our first location in Houston, I want to be the first customer. You can count me in right now.

But I'll tell you one of the things that was most interesting to me as someone who focuses a lot on my health and our culture as a firm, we're a very health conscious culture. And to be able to have, you know, maybe not right now, but pretty soon it to be able to say, okay, here's all your markers, here's all your pabbits, here's what your preferences are, here are all your allergies. You know, I'm the problem child that has all the allergies. And ultimately this is what you need to eat now. This is what's going to, you know, give you the best opportunity to be successful with your health. Because we know ultimately it's diet and exercise. It's going to enable all of us to, to live a longer and hopefully happier life and taking care of that. So appreciate the passion that you have there.

Thank you.

Tell me, as we wrap, you know, for Wonder, you know, what would you say is success for you as you went through your vcp, when you think about success, what does success look like three years from now with Wonder? How do you define it?

Yeah, I mean, three years from now, that's 2028. So we sort of have, you know, soft circled the idea of going public in early 28, late 27, early 28 at that time, Drew. So in about three years, I think the things that we need to accomplish between now and then, you know, if we hit the goals that we've set out, then I think that would be, you know, our three year considered success. We got pretty big ambitious plans, you know, for the size of the company and the profitability in 28, the growth rate. So yeah, we're just head down now and laser focused on the next 36 months getting there, getting this company.

Well, the good news is it's a massive total addressable market. You have the ability to expand about as much as makes sense to do so. So we look forward to watching that journey, you know, Tony, Florence from nea, thank you for joining us. Mark, Lori, thank you for being with us. Mark, Wade, really appreciate everybody being part of, you know, this, of this episode. Thank you gentlemen. We appreciate it.

Thanks, y'.

All.

Thank you guys. A lot of fun. Thanks, everybody. Take care.

You know, Mark, it's. It's fascinating to think about how, you know, the world of technology is going across every aspect of our lives. You know, food, as you mentioned earlier, it's. It's something we pretty much all do every day and sometimes multiple. Multiple times a day. You know. What were your takeaways from that conversation?

Well, I think the first thing was the way that Mark Laurie thought about risk. He was, you could tell he was very comfortable with the concept of risk the way a lot of people think of it. And I think that that's an interesting observation for a guy who's been very successful the way he has where he said, people underestimate the risk of the status quo, underestimate the risk of the status quo and overestimate the risk of change. Meaning people just do what they're comfortable doing. Right. And they think that by staying where they are that they are taking less risk and the opposite could be true. I thought that was really interesting because he's obviously been very successful in his framework where he talked about vision, capital and people. I love hearing about somebody like that who's built multiple businesses, who's had success after success after success after success. That happens from a framework, that happens from a process. It doesn't happen because they're just gifted people. There's a lot of gifted people out there. But it's about blending this giftedness with also an ability to create a process that you can follow on a bigger scale of like starting a company and running it so successfully, but also on a more micro scale where you have to do that within the company in order to make the company itself successful. So that was pretty interesting. And this concept of zero based budgeting, which we talk a lot about internally and how we want to run a business, and, you know, every year we sit and we say, okay, what's the business we're in? What's the business we're really in? What's the business we should be in? Right. So you think, I don't listen to those things.

Tony Robbins, very proud of you right now. That's very good.

I do. And then from Tony Florence, you know, his comment around the periods of dislocation are the best opportunities for entrepreneurship. Where this environment that we've been in the last few years, there has been a tremendous amount of dislocation in the venture capital world and how that's created the best opportunities. And it kind of syncs with some other conversations that we've had on this podcast of how, you know, it's only in the struggles that we really learn things. It's only in the hard times when the best things are created. Easy times, the best times don't. That's, you know, you don't learn very much, then you don't discover very much, then you don't accomplish very much, then that's just the fruit of the labor. It really comes back to the challenging times. It was interesting to hear.

For everybody who's been an athlete, they understand if anybody's ever lifted weights, you don't get stronger by lifting the easy weight over and over and over again. You get stronger by pushing oneself. And it's through that harshness, which literally is the tearing of the fibers that creates the growth of muscle and the growth of strength. And that not always a pleasant experience. Rarely is. It rarely is. And one of the things that really just jumps out at me when we have these conversations with some of these amazing entrepreneurs, they sound different. They have a different level of energy, and their passion for what they do just jumps off of the page or off of a recording or a conversation. It just. They just. They. You know, Tony Florence used the word obsessive, right? So Mark Lore, listening to him, he is obsessed about making this business very, very successful. And goes to sleep at night thinking about it. Goes to sleep at night thinking about it. And it's something to where, you know, we want that passion for everyone to be able to find what they're really driven by and to be able to become the best version of themselves when they do that. But when it's just looking at the fun part of doing all the different themes that we do and investing in all of the different asset classes that make up the holy grail of investing, it is just being able to find those people that are really, really good at what they do, love what they do, want to do it because they just want to be the best. And then basically aligning ourselves with them, it's just really cool. And it's really a fun thing to.

Be able to do. The partnership aspect is something that I think is just very hard to fully appreciate of when you have partners like them and you're aligned with them, how far they will take you. Right. Obviously, you have to contribute in whatever way you're expected to. You don't want to just be riding someone's coattails. But if you're going to be riding coattails and if you're going to be. If you're going to be drafting off of someone is probably the way that I would describe it a little bit better. Those are really good people to be drafting off.

No, absolutely. And so, you know, really appreciate, you know, Tony, Florence and, and, and, and Mark, Laura being with us today. You know, Mark Wade, thank you for your time today. We'll wrap up the Holy Grail of Investing podcast for this session with Tony Robbins and Christopher Zook. And we look forward to getting you involved in the next session that we have. So please join us again.