Instacart co-founder Apoorva Mehta on the DoorDash deal and his new AI-native investment firm Abundance

Speaker 2: First, let me tell you about MongoDB. What's the only thing faster than the AI market? Your business on MongoDB. Don't just build AI. Own the data platform that powers it. We have Apoorva Mehta from... The cofounder of Instacart, former CEO. How are doing?

Speaker 4: Welcome. Great. Great. Excited to be here, guys.

Speaker 1: Great to have you. Massive week. Yeah. And yeah, overdue for this one.

Speaker 2: Always good to take a victory lap for y c twenty twelve, summer twenty twelve.

Speaker 1: Right. That's right. Right. We love an overnight success.

Speaker 2: Overnight success. Yeah.

Speaker 4: Yeah. You guys, it feels great. Feels great. Yeah. Long time coming. And yeah, I just feel just a big sense of gratitude, honestly. There've been thousands of people who worked on this for a decade and a half. And, you know, when when we started the company, I'll be honest, most people didn't think we would be able to pull it off. You know? This is... Instacart is a business in the in the lowest margin category of retail.

Speaker 1: Alright? And then you're like, let's add really complex last mile logistics to that already low margin category. And Sounds like kind of an impossible...

Speaker 2: It was one of these companies like Spotify where mp3.com had failed and Napster had failed and .com. I'm sure venture capitalists when you walked in in twenty twelve, twenty thirteen were saying, oh, I've heard of web van. Grocery delivery doesn't work on the Internet. The economics are all upside down. This won't work. I'm passing. Was that the experience?

Speaker 4: Oh, my God. That happened so many times. I had a VC who literally sort of stepped out of the meeting while I was pitching. Right?

Speaker 2: Classy. Hey, at least he didn't fall asleep. We've heard that

Speaker 1: happen Was to an excuse or did he just kinda get up and like slowly like...

Speaker 2: He said he said mad boring. Mad boring. Mad boring. Mad boring. No.

Speaker 4: You didn't come back? You didn't come I'm still waiting.

Speaker 1: I'm still waiting. He

Speaker 2: might have bought $500 in the public markets at some point, got back in.

Speaker 1: Well, if you ever see him announce as a guest on the show, he's still in business, let us know. We'll ask. Hey, what what did what did you actually do back then? What what what Well, was so

Speaker 2: surprise. From the top rope.

Speaker 1: When did you when did you when was the moment where you're like, okay, think this is gonna really work? Because when you're get... When when you're in that, you know, obviously, you had conviction in the idea, otherwise, you wouldn't have been building it or raising it. But when you get a bunch of smart people that are constantly telling you, like, sorry, like, you know, this has been tried before and, you know, it can kind of hurt your confidence. But what was the moment where you felt like it was clicking?

Speaker 4: You know, to be honest, I I don't think I ever lost conviction, you know? Sick. I always had conviction from day one. There

Speaker 2: was no... Founder.

Speaker 4: I I remember... I mean, this was... Know, there were lots of ups and downs. Right? Like, you know, you obviously had VCs, you know, we we had VCs walking out on us. But, like, look, like, you know, Jeff Bezos went on stage and he was like, look, it's just unlikely that a model like this is the is the right solution. Yeah. And a couple years later, he bought Whole Foods.

Speaker 1: Yeah.

Speaker 4: And, you know, everyone's like, okay, this company is done. Right? Whole Foods the largest partner that we had. Right? Like like, I don't know if it was majority, but like a lot of our sales, like like 50, 60% of our were were Whole Foods. Right? Yeah. And yeah, and then the company survived it. Alright? The company not only survived it, thrived it. And we we had... COVID happened. Alright? All of our competitors went down. Amazon shut down. Target shut down. You know, so many other companies I can't even remember shut down. Right? The team found a way to to not only, you know, stay stay stay online but actually sort of, double and triple our growth during that time, right? And then it survived post COVID as well, right? Like I mean, I like which was like, wow, like the all the growth, right? Like it was not COVID led at this point. It was just you know, purely organic growth that we were seeing, right?

Speaker 1: Yeah.

Speaker 4: And, you know, most recently, Chris Rogers, who's our current CEO, just, you know, you know, did an earnings announcement and this was the best quarter they've had as public company. Yeah. Growth is back, profitability is incredible. I mean, you know, honestly, this is just... It makes me so proud of the thousands of people who sort of, you know, could have easily said that like, look, this is, you know, the conventional wisdom, this is not going to work. Right? But they said no, this time is different, and actually made it happen.

Speaker 2: Yeah.

Speaker 4: And, you know, big, big kudos to the team.

Speaker 2: It's amazing. It's amazing. Yeah. People were...

Speaker 1: I love when I love when love when a business like seemingly breaks logic

Speaker 2: Mhmm.

Speaker 1: But then establishes like some new sort of ground ground truth. Yeah. And it feels like feels like you guys...

Speaker 2: Yeah. The funniest part of the roller coaster is at the end when people try to kind of stuff you in the SaaS pocalypse narrative. I mean, I think DoorDash took like the brunt of it, but still it was like... Everyone's like, okay, that's not a great example. There's a bunch

Speaker 1: of Yeah.

Speaker 2: Legitimate discussions we can have about vibe coding your own SaaS, but the multisided marketplace is maybe a little bit further out on the agentic apocalypse curve, I think. But...

Speaker 1: Yeah. It is so crazy to think back in 2012 if you could, you know, tell your younger self, you're gonna start this company in 2012. By 2026, you're gonna sell it for $17,000,000,000 and you're gonna be like, wow. So it was just up and to the right the whole way. Of course, it was in the fullness of time. I'm very curious how... What what is your what is your point of view on on agents? Whenever whenever like AI agent founders like start talking about how much time they're gonna save consumers, I always kind of chuckle a little bit because you guys, you know, the the Instacarts, the DoorDash, you know, these other marketplaces have like spent a decade like shaving off seconds like, you know, milliseconds every single day, making this process like slightly more convenient every single day. And the compounding effect is that it's, like, extremely fast and easy to get what you want now and seemingly very difficult for agents to, like, actually meaningfully, like, improve that experience. And so it still makes to integrate with them. That's right. But, yeah, what what's what's been your view? Well,

Speaker 4: I mean, like, if you think about what, you know, what Instacart does. Right? Instacart gives people time. Right? Instead of having to schlep your your groceries, you know, get... You know, find parking, find like, you know, wait at the checkout, right? It just makes that activity, which everyone has to do on a weekly basis, you know, you know, it just makes that, you know, a few taps on your phone, right? So it saves, you know, time, saves like hours for everyone every single week, right? And so now you think about what the agentic opportunity here is, right? Is that like, okay, now the agents can save you those taps, right? And, you know... But yeah, you

Speaker 1: already saved them like 99% of the time. Right? Right. And so it's like it's it's not that compelling. Like, if you were to pitch this for a VC, it's like, you're not giving me a 10 x improvement. Like, you guys, original the original pitch was like, if you're saving someone hours, like, that is like a 10 x improvement. Right? But saving somebody like 10 times...

Speaker 4: No. I I I don't wanna I don't wanna completely sort of, you know, you know, say that agents don't add value. They obviously do and they they will, right? I'm very excited about the agents that, you know, Instacart is building and and what the agents that Instacart and DoorDash can build together, right? You know, just imagine, for example, if an agent sort of understands your whole family's dietary needs and, you know, and can reliably figure out what you want to eat and be proactive about that and make you, you know, more healthy and, you know, those things do add a lot of value as well and, you know, I don't think we've seen that so far. I don't think we're we're very early in that journey.

Speaker 1: I was telling... I was I was talking with some folks at a at a major, you know, financial institution and I was like, what you need to be pick... What the thing that you need to be focused on with agents right now is that people are trying to... Are sending their agents to your product because your product lacks something like very fundamental. I think that that's like why I am excited for individual applications to think like how can we make our own software a lot better? How can we make use natural language, understand what users want, make this whole process more convenient within the app? But I'm more bullish on that than I am, you know, the average, like, you know, go go shopping for me. Right? Mhmm. Just because...

Speaker 4: That's right. I mean, you know, if you think about it, like, Instagram is the original agentic company. Yeah. Right? You literally do send an agent to go to the grocery store for you. Right? It is just a human agent. It is a human chopper who's doing that for you. Right? And... But yeah, I agree. I think that there's, you know, a lot of improvement to be made in the overall interface and I think that companies like Instacart that have this, you know, you know, they've solved this extremely hard problem underneath can build those interfaces and, yeah, very excited about about seeing what that trend looks like.

Speaker 2: Do you think we need a new word to differentiate between an agent that you task individually? You give it a task, it goes off and does it and it comes back and it's sort of an asynchronous process that comes back to you versus something that you design that runs continuously forever. I mean, people kind of throw around continuously running agent but when I think about...

Speaker 1: Or yeah, proactive.

Speaker 2: Yeah. Like there are agentic systems that will like go push order order the burrito button.

Speaker 4: Sure.

Speaker 2: And that's a lot less interesting than when do you get the agent that actually knows where you are, what you're eating, what you like to eat and Yeah. And and is just basically handling your lunch order every day on an ongoing basis. And maybe there's Yeah.

Speaker 1: Some Yeah. Like I'm I'm sure you guys thought about this like putting sensors and fridges to Yeah. When

Speaker 2: You're out of milk. You're out

Speaker 1: of something and it automatically orders it. But but a lot of these efforts haven't... The hardware side hasn't really worked.

Speaker 4: I... Look, I I don't wanna comment too much on Instacart. I'm not... I'm no longer the the the CEO, and I think we have an incredible team there. But, like, look, like, you know, I think about agents all day, you know, for my new company. You know, we are... We are... We do have, you know, very, very, very long running agents that are Yeah. You know, continuously, you know, looking for information, getting better and, you know, in doing that in a way that is, you know, not only token efficient, right? But also, you know, in a way that is, you know, where every single day that you run it, you realize that it is just better. You're getting better results for lower cost, lower time. And so, you know, the way I think about this is that, like, you know, we're going to have lots and lots of long running agents in our lives and, you know, if you think about, like, the... What the the analog is for for humans is that, you know, when you and you onboard an employee, right, and, like, they now have... They... You know, you're onboarding them with all the context that they they they need and then over time, as they get more and more content, as they as they do more and more projects with you, they get smarter and smarter, they get better and better at that job, right? But... So, you know, if you think about that, that is effectively, you know, what we're thinking about when we think about a continuously running ongoing agent, right? And so, you know, know, hardware, things like that are just ways to plug in more context for that agent. And so, we're going see that in the consumer world but I think we're going to see that far more in the enterprise world because there, you know, you know, you're just willing to pay more for, you know, faster information, better information that gives you, you know, a massive competitive advantage as a as a as a company. You know, as consumers, I don't think anyone's really figured out how to charge people for this. Right? Like, I think, you know, we saw that Elon tweet recently where he was like, the revenue didn't make sense for, you know, the the

Speaker 2: Rock bottom.

Speaker 4: You know, for for the margin that we were spending on it or something like that. So I do think this is going to be something that we're going to see over the next few years. That gets solved. But so far, it's far more interesting in the enterprise setting.

Speaker 2: Yeah. Yep. How are you thinking about agentic trading AI hedge fund activity spreading among other institutions that have frontier model capabilities? Like Google for a long time, I mean, they're spending a lot of cash but they've had a huge balance sheet And there's a pretty small treasury team, I believe, that moved that money around. They've always had the opportunity to do something more aggressive or differentiated with that. Do you think that that will take off broadly? Is this gonna be a new trend? Or would they partner with a fund on something? Do you think that that plays out as the capability becomes more diffused?

Speaker 4: Yeah. I mean, you know, so this is what's new. Right? This is what's new about, you know, AI based trading.

Speaker 2: Mhmm.

Speaker 4: Right? The reality is that, like, you know, have people been using machine learning models you know, algorithms to trade before? Yes. Right? Like that's not new, right? There's like, you know, Renaissance exists, for example, right? Like, you know, but the the you know, historically, the primary way they've been doing that is, you know, more what's called stat arb.

Speaker 2: Mhmm.

Speaker 4: Right? This is more, you know, understanding, you know, statistical, you know Patterns. Patterns, right? And, you know, basically making a call based on those patterns to say, hey, you know, these patterns are going to repeat in somewhere or not, right? And that's primarily the way ML and AI has been, you know, used. But for the first time, you can have, you know, reasoning, right? Like, know, what Warren Buffet would do, right? When they're analyzing a company, they're saying, hey, what are the moats? Right? How strong are these moats? Like, how like Mhmm. How durable is this growth, etcetera, etcetera. Like, these are very complex questions that are not, you know you know, you know, they're not necessarily, you know, stat arb. They're much more fundamental, you know, research, right? And and that's what AI trading and and, you know, AI agentic, you know, you know, capital allocation allows for. Yeah. And and so now, your question is, okay, well, is Google going to do it? I'm not sure. Uh-huh. These things are still exceptionally hard to build. Mhmm. And whatever you think is simple, right, chances are those things just get priced in and that that alpha just decays very fast.

Speaker 1: Yeah. So so are you thinking about hardware at abundance? Because I imagine you'll see the same... Like, if you're now introducing, like, reasoning into this sort of algorithmic trading, you might see the same sort of arms race that that we saw in sort of traditional high frequency trading playing out with this sort of new iteration as in like, if I can basically... If I if I can get tokens like faster and like something happens in the market and my... And I just have faster chip, I can probably get a better entry or exit or or whatever. And so do you think that's something that, like, you're gonna need to have, like, compute on prem? Or is that, like, kind of would be an adjacent strategy?

Speaker 4: Yeah. So there's several different strategies, you know, to... There are actually probably like several 100 different strategies here to to to play. And now, you know, maybe at at a high level, right, when I was leaving Instacart, there's sort of, you know, two things that I wanted to do, you know, in my next company. Number one, I wanted to be... To have the potential to be a trillion dollar company. And, you know, I mean, obviously, it's been inspiring to see what anthropical is doing. Five... Sound effect for

Speaker 1: Sorry. The trillion dollar

Speaker 4: That's right. I mean, I love that. I love that sound effect. You know, five years... Five, six years, you know, hopefully, multi trillion dollar company, right? It's incredible. Incredible, right? So that was number one. Number two is it had to be beneficial to humanity, you know? Just like... I just care about that and just like something that I wanted to have happen in my next company. And with abundance, believe that, you know, I found that. But I guess like, probably, you know, what's even the coolest part is that... Is how fun it is, And now, we've thought a lot about hardware like you brought up. But I would say, you know, for us, I think we have other ways we build advantages. And we certainly do capital allocation in the public market but, you know, we also do that in, you know, other places where we believe we have, you know, much larger returns, much more durable returns, and, you know, and and much more impactful returns as well. And so, you

Speaker 1: I gonna say I was gonna say you're like, I wanted to do something that was just like good for the world and then you're launching a hedge fund, is like a contrarian, maybe contrarian, but it sounds like you're allocating places that you'll probably be able to talk more about in let's say like a couple years once you once you get a little more established.

Speaker 4: You don't think hedge funds are doing great...

Speaker 1: I do. I mean, we've been we've been some of the strongest defenders of private equity broadly.

Speaker 2: We need accurate prices in markets. Yes. Obviously.

Speaker 4: Yeah. Look, I agree. I think that there is certainly some, you know, efficiency and liquidity that you know, hedge funds add. But, you know, but, yes, I think you're right. Like, you know, we do think that capital allocation has, you know, a bigger part to play than just adding liquidity the market. And and that, I think, is just, you know... You know what's... So the coolest thing about AI is these new... These lines of how we thought about these businesses are going to completely change.

Speaker 2: Mhmm.

Speaker 4: Right? Like, you know, you you would see like, okay, like, this is a SaaS company that's just going do SaaS, SaaS, SaaS, SaaS. Right? Like, now, as we're thinking about outcomes, we're thinking about, you know, you know, new type of holding companies, etcetera. So I just think that, you know, the the lines are being redrawn with AI and and, you know, we we hope to to do that in in our own sector.

Speaker 1: I love it. Very cool. Congratulations. You certainly did it with with with Instacart in a Sit that goal. In a different way. Congratulations to the to the whole team. It's really a tremendous story and, yeah, very, very happy Overnight for your guys' outcome.

Speaker 2: A classic overnight success. We'd love

Speaker 3: to see...

Speaker 1: Come back on as you can as you can talk more about about what you're doing as well. Yeah. It's very cool.

Speaker 4: Definitely. Awesome, guys. Thank you....

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