I think in the next decade there’ll be a new type of labor in the world called robot wrangler. We’re going to have all these devices in the world, humanoids doing our laundry and Tesla’s driving around and they’re going to break down and they’re going to need to be maintained and cleaned.
[00:18.3]
Why not call them like, robot engineers or something? I guess that’s right. Maybe. Maybe people are willing to pay more if I call them robot engineers. Yeah. Thank you, robot researchers.
[00:33.2]
Hi, everyone. Welcome to Founders in the Arms with me, Immad Akhund, co founder and CEO of Mercury. And I’m Raj Suri, co founder of Lima and Tribe. And today we have with us Sumir Meghani Who is the founder CEO of Instawork. Welcome, Sumir. Hey, guys.
[00:48.3]
Thanks for having me. Hey, it’s great to have you, man. So have you met Immad before? Is this the first time you guys are meeting and we haven’t met? Biffle in now. Oh, cool, cool, cool. Mind you forgot we were in, we’re in, Well, we’re not in the same group. We’re in the same, like, we’re in a CEO group together, but not in the same exact forum.
[01:07.0]
Wait, which one? Ypo. Oh, you and ypo. We had lunch together. We had lunch together a couple months ago. Okay. Sorry, Sumir, I’m really bad at these things sometimes. I probably met a lot of people that day. But that’s cool. Were you at the recent retreat?
[01:23.8]
I was. I was there for the first, night. My dad was having surgery the next day. But, yeah, I was there for the first night. Yeah. This YPO thing is cool. I recommend it to anyone listening who wants to have like a CEO forum to get together with.
[01:40.5]
Roger, you part of any kind of CEO group thing? No, no, they don’t let me in. I’m kidding. Just being disqualified at the highest level. Yeah, I used to organize my own. Actually. I used to just like, message founders and like, have.
[01:57.3]
I used to run my own CEO like, meetings and some of those meetings that we had, actually, I mean, a lot of them have been on the podcast, actually, a lot of those people. But there’s, you know, they’ve been great relationships. So just like my own CEO dinners, like six, seven people. I used to do that.
[02:12.3]
I used to do that too. It’s just hard. Like, everyone’s so busy and it’s hard to get people to show up, enough, and do it regularly enough. Whereas this YPO thing is just like every month it’s like four or five hours. It’s nice to have that consistency.
[02:27.7]
Yeah, it enforces the commitment of attendance as well. Imad which is getting the same group back regularly to be able to track people’s trajectory, is I think really nice. So a. It’s just really hard to join. Like, there’s like, it’s one of the hardest things to join that I’ve joined.
[02:45.3]
Like, there’s like five levels of interviews and things like that. And you know, every time you go through the process, like, hey, we’re only letting you in if you’re really committed to this and there’s this like, kind of like you, it forces you to say that you’re gonna do it. And then in theory if you, if you miss more than one and there isn’t a good reason, they’ll kick you out.
[03:03.1]
I don’t know if they. It’s really enforced, but there’s just like this understanding. And then you also pay a lot of money every year, so you feel like, guilty if you’re not like using it. Is there anything else, Amir? I think those are probably the three things. Yeah, those are the three things. And it’s it’s meant to be.
[03:20.1]
It’s like super highly confidential. And one of the benefits is it tends to be people you don’t really know. And when I’ve done the casual CEO dinners, they’re all people you know and people your spouses know and people you hang out with a lot. And so it is nice to actually you know, spend time with the different kind of crew where you’re, It’s a different part of your life.
[03:41.9]
Yeah, the confidentiality thing is a good point. All right, well, let’s maybe talk about Samir a little bit. Samir, you’ve been doing startups, and in the startup space for a long time. Maybe give us like a quick summary of like, you know, how you got to insta work. Well, I grew up in southeast Michigan, from Detroit.
[03:59.4]
My parents immigrated here, from India. And I’d say my first, my first taste of being an hourly worker was supporting my parents. They owned, a couple small businesses in, in, in the Detroit area. And when they would see a demand surge, live orders coming in or a labor shock, where someone didn’t show up, I get the call.
[04:24.7]
And I understood at a young age, although I didn’t quite know where it would take me, the challenges of finding workers, particularly semi skilled or hourly workers. Fast, forward to my time at Groupon, I think Rajat.
[04:41.6]
That’s when I was at Groupon, probably the first time we crossed paths working with restaurants and hospitality and hotels. It turned out that for most businesses, their biggest challenge isn’t customers, particularly businesses that have hourly workers or small businesses.
[04:58.5]
It’s, staffing. And I still vividly remember visiting a restaurant in San Francisco, in North Beach. We were living in Chicago at the time. And when I was at Groupon and we had this elaborate pitch, on why the owner should run a Groupon, the restaurant was empty during lunchtime and we talked about fixed costs and all the incremental revenue Groupon could bring.
[05:20.0]
And the owner pointed to a sign on the window, that basically said, necesito lafa platos, which in Spanish means you need dishwashers. And it struck me that here was a business that couldn’t handle more customers because they were down a dishwasher.
[05:38.3]
And that was a lot of the inspiration for instawork, which was, here in the Valley, if I want to go find a great forward deployed engineer or cfo, countless tools and services available to me. But even here, walking, down the Mission, you’ll see a sign on the window, every other door, even at a nice hotel, a nice restaurant, a warehouse.
[06:00.9]
And it struck me that there’s got to be a better way to match, hourly workers who have the same reputation and skills and aspirations that the three of us have, with businesses that have large, labor needs. I feel like this is a particularly big problem in the Bay Area because every, like the housing is so expensive that like there’s just less kind of people, that are wanting to be service workers that can stay in the area.
[06:27.9]
Is this also a problem across the whole US I think it’s a problem across the whole world actually. I think everywhere you go the problem remains, which is, you know, the hourly workforce, the information about the talent doesn’t exist digitally.
[06:44.1]
And like I said, if I’m, if I’m a line cook in Austin, Barcelona or San Francisco, right. I’ve got skills, I’ve got references, but I don’t have. There’s no LinkedIn profile for me. And the data about me lives in thousand people’s heads, but doesn’t live in any, sort of digital format.
[07:02.6]
And that makes it very difficult because every time I resume my job search, I’m starting over again. The economic, trends, you Mentioned, imad certainly hold true as well. Cost of living is going up in a lot of big cities, and, in many cases, hourly workers, it’s harder and harder.
[07:19.1]
Harder, to survive. That’s sort of one side of it. But the other side of it is, I think, services like Uber, DoorDash, Instawork. What we’ve been able to show is that in many cases, people have a desire to work more than is what’s available.
[07:34.6]
And at InstaWork, I think of our job every day is just creating more employment in the world. And if you can make employment available at the touch of a button, just to make it as easy as tap water, how much employment could exist in the world? And we’re not just filling open jobs, but we’re creating new micro jobs.
[07:50.8]
And I think all of these services have sort of shown people’s willingness to want to work more if it was easy, less friction, convenient, et cetera. So do you actually make a profile for every worker on the platform? Is it kind of like a LinkedIn for this industry?
[08:06.9]
Yeah, we have profiles for 9 million, pros on Instawork. And for every pro, there’s probably a couple hundred different data points we collect. I’m sure we’ll talk about AI later. And we’re using AI, to collect even more information about our pros, what are they good at, what’s their knowledge of wine or how to lift a box or how, to interface with customers, what POS system to use.
[08:33.0]
And that profile then helps us, match them with businesses that have a temporary, flexible need, or a permanent need, as well. And I think that’s really important. We don’t use the profile today, very publicly the way LinkedIn might, but we have a lot of the ingredients, to create what we call internally profile of record.
[08:54.2]
Yeah. I always wonder with marketplaces, like, how they get started. Was there a particular kind of geo and, type of industry that you initially target? Is that how you kind of kick off this kind of marketplace? Yeah, it’s probably my best advice, and learning, having gone through it, which is you have to start boring and narrow, and it’s counterintuitive to the way a lot of founders want to think about their business.
[09:19.7]
Right. We want to scale the, the mountain. Day one. You want to conquer everything. Rajith, I’m curious when, when you started, I know you sold into hospitality, what it was like, but we, we started helping restaurants in San Francisco hire cooks only restaurants, only in San Francisco and only cooks.
[09:37.0]
And we avoided every impulse to like the, like, presumably not the, like the chief chef. Like this is like the rest of the staff behind the kitchen. That’s right, yeah. Hourly line cooks who are among the hardest working people.
[09:52.8]
Why did you pick cooks? Like San Francisco restaurants kind of make sense, but cooks seem specific. We were in Y Combinator and I was walking home from the Dock patch to Potrero where we lived. And we stopped at, a bar called Third Rail owned by a guy named Phil west who, is a very well known restaurateur in San Francisco.
[10:11.3]
And he had this bar called Third Rail. We were talking about insta work and he said, you guys are going to fail. And, and I said, why? He said, there are no line cooks in San Francisco. They’ve all left. Imad back to your point about cost of living. And he just said, they don’t exist. It doesn’t matter how great your app is and your product, they just, they’re not in San Francisco.
[10:30.8]
They’ve all gone. And I made a bet with him, I think over a drink that I, will go home tonight and I’m going to get you two interviews tomorrow for line cooks. I will go find them. And he said, game on. And we picked line cooks because the first business to use instant work said that’s what they needed.
[10:46.9]
And of course he knew 10 other restaurants that all needed line cooks. And we kind of stumbled into it. But if you think about great marketplaces, you know, Zuckerberg started, with 1600 Harvard kids with Facebook. Uber was black car.
[11:03.4]
Narrowing your focus really early on because it’s all about liquidity and getting the matching. It’s just much easier to do when, you’re very narrow and having small. Paul Buchheit always used to tell me at Y Combinator, better to have 100 people love you than a million people think you’re average.
[11:19.0]
And it’s just amazing. It’s much easier to create that amazing experience when, you’re boiling, a cup of water versus the whole ocean. Raja, does any of that resonate with you when you got started? Oh, yeah. I mean for sure. I mean one, I worked as an hourly worker as well, you know, just to understand how the experience was as, you know, as a waiter, you know, and I spent most of my time with waiters, you know, building the product for presto.
[11:42.5]
So, yeah, definitely. And then later on, I mean we were also targeting, you know, the hourly worker crisis in a different way obviously with automation. Right. So we were doing, you know, tablets for the table. So and then the big benefit for tablets for the table is that you know, the the, the waiter didn’t need to walk back to the point of sale system, you know, and save a couple trips so you can process the payment right there at the table.
[12:07.4]
Right. And, and, and that was like the big part of the business model and the business case for that product. Same with Voice AI for Drive Thru which you know that’s still going on and that’s you know that the restaurant to go and do other things versus take the order. And I mean it’s such a huge, I mean hourly workers and labor was the number one pain point for the hospitality industry.
[12:27.6]
Number one. Right. And, and it got worse over the like 10 plus years. I was, I was you know, running Presto. It was like start in 2010, it wasn’t that bad. And then 2020 and then 2021 it became acute. And you know, I mean people, there’s just a lower, a smaller labor force in the country over time relative to the size of the economy.
[12:47.4]
So like this becomes the number one problem for all. Yeah. And maybe this does happen. But I feel like the stats I’ve seen like hourly wages haven’t gone up that much. Like if there’s such a labor shortage, why, why does the like the cost of labor go up to make up for it?
[13:03.7]
It’s complicated. And I think that’s gone up though. Right. Like it’s over a $20 minimum wage here in California now. It was like seven before, right. Like over 10, 15 years, is that right? Most of the minimum wage certainly in California has gone up. Not, it’s not universal.
[13:20.8]
But you’re talking about in many cases businesses within margins. These are retail, businesses or warehouses or restaurants. And labor is a big chunk of their cost structure and these are high turnover industries, typically hourly workers turnover, just because of life events and changes in the economy.
[13:42.6]
And as a result you’re sort of always looking for people and you find someone through a service like insta work and then maybe somebody else leaves because they’re moving across the country or their life situation has changed. And as a result it’s more than just the hourly cost. Plus there’s regulation. Obviously health care has been a big topic and so I think there’s pressures on both sides.
[14:02.2]
Of course, inflation in the economy has been a big topic the last couple of years. Even though, wages have gone up, arguably, that’s not universally. And even in San Francisco, where we know, to even go get a burrito, it’s expensive. It’s crazy how much food costs now, right?
[14:19.1]
I mean like you buy a salad, it’s $25. You know, pasta is 30 plus dollars. I mean, you know, when we, when we all came to the value, I don’t know, I came around 2010. Right. Probably a little bit earlier. I mean, pasta used to cost eight to ten dollars. Right. You know, it’s not like, you know, now it’s 25.
[14:37.2]
I mean, I think labor is a big part of that. Right? Labor inflation is probably the number one factor. Right. One of the places I think services like insta work and in general flexible work can, can drive a good outcome for everyone is take food delivery, which now is a big way. A lot of us consume our meals.
[14:53.8]
A restaurant, a catering service may decide to, be available on Uber Eats or on Door Dash. And maybe before you’d need permanent staff for 40, 50 hours a week, just to be able to service that extra business you’re getting.
[15:10.1]
But now with flexible work, you might just need people for three hours a day during the lunchtime rush. And there’s probably a dishwasher or a cook, or a warehouse worker available during those periods. Periods, and I think of it like a Tetris, board. I’m dating myself because I don’t know how many listeners have played Tetris, but, labor market is effectively a Tetris board.
[15:30.3]
And, you think about all the places where businesses might need incremental help and where there might be, a worker of an hourly professional that wants incremental work. And if we can help fill in that Tetris board cleanly, we are effectively creating more employment, which I think I know there was a big election a couple days ago and election day around the country, like, no matter what side of the political aisle you’re on, I think everybody agrees, more employment, more people working if they want to work, is like a great thing for the world.
[15:58.5]
Yeah, I had a couple of small, like just factoids for our audience here that might be interesting. This is something I’ve studied like in detail. Right? Like the, the labor cost of a business is really interesting. Like the percentage of labor, like the cost, any business spends on labor.
[16:14.0]
So I think for restaurants it was about 30% that they paid of their revenue to labor. Hospitals actually play like 70, 80%. So like nurses for example, you know, like, are a huge part of like, you know, the cost of their model.
[16:30.5]
Samir, do you know, it sounds like you have some other you know, factoids as well around this one. It’s an incredibly big cost. And then back to Iman’s point earlier about it’s more than just the hourly rate because when you’re, when you’re turning people over all the time, there’s a cost, cost around onboarding and recruiting and finding the right person that’s not even included in that.
[16:53.8]
So it’s like, it’s, it’s a lot of, it’s a lot of expense and it’s, it’s it’s high cost in all the other ways you go and fill that labor in and I think that has repercussions in terms of how you run your business. And it’s over 100% turnover, I believe, in restaurants. So every year they’ll turn over their entire staff, you know, on average.
[17:13.3]
Yeah. So just everyone knows how can you even run a business like that? That means if you have 10 staff like every every month there’s someone new. Yeah, yeah, it’s, it’s only within store. It’s really hard. Well, it’s hard to have any institutional knowledge in that situation. Right. Like no one remembers anyone’s being constantly training.
[17:31.2]
Yeah, constantly training. You’re constantly recruiting, you know, you’re constantly dealing with issues around labor. I mean it’s, it’s your number one problem. Do we think AI is going to help with this stuff? I mean, obviously Presto was building some AI automation with the voice AI stuff.
[17:47.9]
There’s a bunch of kind of robot startups that are trying to go after various kind of warehouse jobs. Is that just really far away or have you seen any impact of that? We’re still figuring it out. And the way I talk about AI and hourly work, Imad, I tell my team, it’s a mystery.
[18:06.4]
There’s puzzles and there’s mysteries and mysteries we just don’t know and we have to live with, with just uncertainty. But there’s a couple places where I think AI can help. One thing we’ve tried to get really good at is create what I called embedded knowledge in insta work.
[18:23.6]
The more a business can tell us about the work that needs to be done, the more we can make sure our 9 million pros are prepared. It’s not just a warehouse worker going into a warehouse to be able to pick and pack boxes or a line cook or bartender going into a stadium, like Oracle park to go do work.
[18:46.1]
But it’s, can we get more specificity on the layout and the culture, and the more that businesses can tell us about that, we can make the training and onboarding, friction much lower what Rajat was just talking about. And that’s a place where we’ve been able to use AI a lot and make sure that a new pro from instal work, if they show up to a job day one, they’re ready to go.
[19:10.6]
And that’s in the short term. I think in the long term. The big thing I’m spending time on, and it’s been really fun to be a founder again is to think about robots and robotics and a phrase that I call physical AI, which is whether it’s a Tesla or a Waymo or robotics in the warehouse or the stadium or the kitchen, what is that going to mean for 100 million hourly workers in the US and how can InstaWork be a leader in having our pool of professionals, participate in robot learning and robot development?
[19:41.1]
So we’re working with a bunch of robot companies and foundational labs on using our human labor pool to help train robot models. Oh, that’s cool. Like a scale AI. Kind of like a scale AI for like robotics. That’s kind of the idea, I think directionally, you know.
[19:57.6]
That’s right. There’s a lot of differences between I think, training LLMs and robots. And it’s still very early. But that’s been exciting. And then there’s a new type of hourly labor imad that I’m excited about. So I’m going to try out this phrase with your audience. I think in the next decade there’ll be a new type of labor in the world called robot wrangler.
[20:16.1]
We’re going to have all these devices in the world, humanoids doing our laundry and Teslas driving around and they’re going to break down and they’re going to need to be maintained and cleaned. Why not call them robot engineers or something? I guess that’s right.
[20:32.4]
Maybe people are willing to pay more if I call them robots issue. That’s a good point. Yeah, thank you. You want to robot as much as that’s a, that’s a cool concept though. Yeah, we’re thinking a lot, when, when we’re spending time with companies that are, are doing large scale deployments over the next year or two.
[20:51.7]
And they’re thinking about what’s the field operations team that’s going to make our robot successful. And I, I think ushering a world where skilled hourly workers can be co pilots and partners to automation, is a really exciting outcome in a world where everyone’s talking about how AI is going to take away jobs and I’m thinking about how do I create forward deployed robot engineers and co pilots.
[21:17.8]
I think that’s a much more positive, optimistic view of things. Yeah, I think that’s actually like when I look at Lyft for example, where that’s going to go, a lot of it is going to be they’re going to repurpose their labor for, for maintaining self driving cars. I think that you know, that’s like the future, but that, I mean the math doesn’t work unless there’s less labor involved.
[21:37.7]
Right. Like it’s not like if you take the, if it, you know, right now there’s one driver for every, every car, you’re going to have one. Yeah. Robot engineer for every 20 cars. Right. So it is less, less jobs. But I mean I’m still optimistic that new jobs will get created at a fast enough pace and obviously we have a labor shortage anyway.
[21:56.8]
But but I do think they’re gonna be higher paid for sure. Yeah, yeah. And they’re better jobs. You know, instead of sitting in the car, like, you know, you actually go to an office and like they’re higher quality kind of higher quality work. Right. It’s a little bit like, I guess, you know.
[22:14.0]
Yeah, I mean, yeah, every time you, you add robots you have to add maintenance. It’s definitely going to be fewer jobs, but it’s going to be you still need a good source of labor for that and I think for a lot of things around AI. Are you doing any of the stuff Sameer, that Uber is now using some of their drivers to do AI training.
[22:35.5]
Have you done any of that? Yeah, that’s more in line with the first bucket of how do we use human data, human video, one of our professionals chopping an onion at home or in a commercial kitchen or a chase center. And how do we take that data to help make a robot cook successful?
[22:52.4]
So we’re definitely doing that. We haven’t announced anything yet, but it’s probably where I’m spending the most time right now. And I always joke, I studied computer science in College, but the one EE class I took was electronics 40e40 at Stanford. And I think I got a C in it and it moved me away from anything hardware related.
[23:11.3]
So it’s definitely a struggle. But I’m learning a lot and it’s been a lot of fun to spend time with, a lot of hardware and robotics folks. The last six months especially, I guess a bit of a segue here, there. You know, you’ve been, obviously you were very young then, but you’ve seen kind of various cycles in the tech ecosystem, with like, you know, booms and busts.
[23:33.1]
How do you feel about kind of this current AI cycle? Like do you, you know, I guess. How have you changed what you’re doing at InstaWork because of it? You know, or is it like business as usual from your perspective? Yeah, I’ve seen a lot of shifts and cycles as you mentioned.
[23:53.4]
So as our board, Bill Gurley is on our board and we talk about this a lot. The dot com kind of bubble, the shift to mobile, a lot of these things. And AI does feel that big. And I think back to there was this really. I also find like these micro cycles are kind of funny.
[24:09.0]
There was this like huge Groupon cycle right where there was like. That’s right. There was a six month period where like there was literally like 50 Groupon clones that were funded and like every variety you could imagine. It was completely crazy. And the way I look at it is AI is real.
[24:26.1]
I think social commerce was real, search was real, social networking was real. And there was a lot of value that was created for users in the form of great products. Of course investors and employees and wealth was part of it as well. But there was a lot of money lost. Yeah. Rajat, I’m sure you remember Lycos and altavista and Infoseek, but people today, we just know Google and maybe the new generation will just know, Perplexity or chatgpt.
[24:51.3]
And I think there’ll be a lot of value, destroyed. But overall there’ll be a ton of value created from just great companies. And so I think it’s real. I think you have to hold two things true at the same time. That AI is real and it’s going to create a ton of value for society and there’s going to be a lot of wealth created as well.
[25:07.3]
But there’ll be a lot of value destroyed in companies that don’t make it. We spend a lot of time thinking about Voice at Instawork because voice is a really great way for hourly workers to interact with the product that we have.
[25:23.2]
And every time I meet a voice AI company, it’s unclear how they’re differentiated from the 20 other companies I’ve met. And because it’s very easy to build, I think differentiation is harder and harder. And so as a consumer of AI products, whether it’s voice or video, that we’re eager to spend money on and integrate into our products, it’s harder for our teams to really understand, who is differentiated and who has staying power.
[25:51.2]
Yeah. Yeah, I heard this. It is really hard because everyone’s also overselling their stuff. We’re doing, we’ve tried to use a bunch of AI tools and they’ve turned out to be like kind of oversold a little bit. Right now we’re doing like a test where we’re like trying five at the same time for one use case because we really want someone to solve the use case.
[26:09.4]
We have no idea which one’s going to be good. So it’s like a huge bake off. I actually, was talking to a CEO yesterday and he said he set up a team that can onboard and offboard AI tools like within seven days. So their thing is just like they have like two people.
[26:24.8]
I mean it’s a pretty big company, but they have two people just continuously trying to find for different parts of their company the best AI tools, but being very good at testing them basically, and training the teams to use them. Just using AI tools is a whole category of, you know, take making the most of them is like actually quite tricky.
[26:46.1]
I have a question about just the labor market. You know, like the labor market for white collar workers is clearly contracting right? In the US it’s you know, we’re seeing layoffs upon layoffs. You know, when I put up a job ad right now I get thousands of resumes.
[27:05.1]
You know, before it was hard to get tens, now it’s like thousands. And I was thought that was like the tech space. Is that true across all white collar labor? That’s my question. Sumir, what are you seeing in the hourly physical space? Because white collar is being decimated.
[27:22.0]
What’s happening in the more physical industries? It’s not as extreme as what you describe. But take a step back. When you look at after Covid, no one could find any workers, white collar or blue collar.
[27:39.5]
And particularly in our world, you had a situation where a lot of people were staying at home because of government benefits. People were scared because of COVID maybe they had health issues. There was a big disruption in the labor market. And I think now there’s what I, the CEO of a large global, staffing, agency, he calls it hoarding.
[28:00.4]
He thinks there’s just hoarding happening right now where people don’t want to let go, of their existing team members. People don’t really want to quit and they’re just kind of hoarding and acquitting, of the labor market. While people wait to see what’s going to happen with AI, people wait to see what’s going to happen with tariffs, which, every day, every week is a little bit different.
[28:20.6]
And because of that hesitation, the economy is not, not bad. But if you took out, the top 10 tech stocks, I think people would say it’s sort of, there’s a lot of hesitation. And I think that hesitation combined with AI has created some headwinds around people’s willingness to be aggressive around hiring, more new people.
[28:38.8]
And Rajat, what you described, we’re certainly seeing it in tech, like in our own world, but, I think some of it’s bleeding over to blue collar. But, because the impact of AI is not as pronounced there, the overall impact is, I think, less, severe. Yeah, I mean, what I’m thinking is, what I’m wondering is, are more jobs going to move to the physical industries?
[29:01.6]
Because AI can solve so many problems with data, right. And information. So it kind of stands to reason that more jobs would probably move over to like, you know, being plumbers or electricians or in the trades or even in the hourly worker class. More people will train to be those workers and more people, you know, there may also be more demand for that as AI, you know, creates more productivity, in other industries.
[29:28.6]
100%, if you think about what, the current administration here in the US has been signaling. And there’s general excitement around, bringing at least some manufacturing back to the U.S. data centers and the need for power, automation, whether it’s full scale humanoids or even basic automation in the warehouse.
[29:50.0]
And all of that is, I think, going to create the need for semi, skilled and high skilled hourly workers, including the trades, as you mentioned. And as part of that, I do feel like one issue in America is like, like white collar work is like put on this like, pedestal.
[30:09.5]
Whereas, like, you know, there’s just like the culture is very much like, oh, you go to college and you get a white collar job, even if, like, you hate it, versus, like there isn’t like a, hey, you get trained up and you work, you know, you manufacture something. Or like, I feel like that needs to get fixed.
[30:26.2]
I don’t know what fixes that really, but. But there’s just a gap of recognizing the value of that work. Yeah. I remember, out of Y Combinator, we were trying to raise our seed round. Imad and, went to the Four Seasons on Market street to meet an investor.
[30:42.7]
And, they were sitting on the sofa right outside the restaurant, of the Four Seasons. And he saw us, and me and my co founder were there and he said, well, I heard you guys are into recruiting. And I said, yeah. And he said, well, what type of roles? Engineers? And I said, no. And he said, designers?
[30:58.5]
No. And I said, line cooks. And I still remember the look on his face, the droopiness where he just became uninterested because it’s not something that, at least in the Valley, people are exposed to. Even though we’re sitting at a restaurant where there’s probably 100 hourly workers sitting behind him and around him.
[31:16.3]
At the Four Seasons. But I still remember that because he just knew we were into recruiting and assumed it was something white collar related. And, that gave us some motivation for the next 10, pitches after that. But that was a fun story. It is funny how you remember these early moments where someone doubts you.
[31:37.0]
Right? Like the guy saying, you’re not going to get him two line cooks. That kind of stuff is weirdly motivating. So many VCs hated the fact that we sold to restaurants, we worked with restaurants, and we’re trying to automate restaurants. They just hated it. And, they’re like, oh, I never go to Chili’s.
[31:53.7]
Why would I buy? Talk about Michelin star, maybe. But, yeah, VCs have this blind spot, right, where they only like to invest in things that are very close to them. In many cases, Bill Gurley doesn’t. Bill Gurley actually came to meet us several times, so. I’m not surprised he invested in you guys.
[32:10.1]
Cool. Should we go to Rapid Fire questions? Let’s do it. Yeah. What would you say is the biggest mistake you’ve made in your entrepreneurship career? I’d say the biggest mistake. It’s not an individual mistake, but it’s a set of mistakes is, I think every time I’ve had to make, in hindsight, what’s a difficult decision I’ve Waited too long.
[32:30.1]
And making tough decisions more quickly when you know what needs to be done then just getting it done is something I reflect on a lot. Like with hiring people or strategic decisions or a bit of both.
[32:48.2]
Yeah. I think for us when we early pivots parting ways with great people who aren’t working out for whatever reason, we tend to as humans avoid confrontation and don’t generally walk in every day wanting to just embrace tough decisions.
[33:07.4]
But I think doing it and doing it with authority and speed is something that I’ve tried to get better at over time. Yeah, that’s always hard. What’s the most rewarding part of your journey so far? Insta works about 10 years old and I started the company right when my wife and I had our first kid who she’s now 10 as I mentioned and don’t recommend starting a company right when a couple weeks after your wife’s giving birth.
[33:35.1]
But it’s been really fun to kind of watch these two startups now like grow in parallel. But yeah been, that’s been a lot of fun I think the journey of being a parent, and all the trials and tribulations and joys that come with that along with the startup.
[33:53.6]
But yeah, otherwise like just creating jobs I think creating jobs and waking up every day, even on, on tough days. And then there are many of them as you guys know, being able to walk out the door at the end of the day and say like jobs were created because of the work we did. That’s like, that keeps me going and that I think keeps a lot of people who are going through good times and bad.
[34:12.4]
This is a variant on a question, but what’s something important you believe that you think most people in Silicon Valley don’t believe? I think in the Valley, we tend to reward founders that think very big and we have big ambitions.
[34:29.6]
We want self driving helicopters or we want to go find a cure for cancer. There’s a lot of IMOD right now as you talked about hype with AI and I think maybe I’m old school in this but I think starting simply back to just how I described Insta work in the early days, like we’re going to help San Francisco restaurants find cooks and no one gets out of bed ready to go start a pitch to a VC and say that’s what we do.
[34:55.2]
But that’s almost what I think you need to be able to do. Can you express in the simplest forms possible why you exist and why you’re good for the world? And just nail that. And you can nail that. And I think of businesses as a bunch of concentric circles and then you nail the one after that and then the one after that.
[35:11.5]
And I think a lot of times in the Valley, people start the other way around, which is like, I’m going to do this. And you don’t have a stepping stone on how you get there. And I think the best entrepreneurs or founders can have both. Right. They’ve got the big audacious vision and then, the steps on how to get there.
[35:27.6]
And I think by the way, that touches every part of how you build a company, including fundraising, where it’s not about the biggest round most of the time. And, and it’s how you raise capital in a really thoughtful way to minimize risk in every stage versus just going and raising the biggest round you can go raise quickly because someone’s willing to write you that check.
[35:45.7]
Which I think right now is not the attitude most people have. Yeah, I mean, right now, especially VCs are kind of rewarding, going straight for that big, audacious thing. It’s like SSI is like kind of the most extreme example. They raise like a billion dollars in day zero and they’re literally saying, we will not launch anything until we get to superintelligence or something.
[36:07.4]
That’s exactly right. What’s the most uncomfortable piece of feedback you’ve received? Iman. I’ll put on my, I’ll pretend we’re in YPO forum and maybe be a little bit vulnerable. And I think back seven, eight years ago, I had a colleague, a colleague I’d hired tell me in one of our first one on ones that, he used a phrase that I lead by disappointment.
[36:29.4]
And he didn’t mean it as. Actually, he wasn’t saying it to me to be critical. I think he just said that he had never met someone. Right. That was like. Was disappointed so often and like, like you get like, how do you, how do you show your disappointment?
[36:49.1]
Yeah, well, just like the numbers are never good enough or something wasn’t shipped quickly enough or the mocks weren’t good enough. And I, I’d say, I’d say, the glass half full of that was like high standards. I think having high standards that you hold yourself to and everyone around you. And you can imagine being the father of two kids, like, what that translates like at Home with kids.
[37:08.8]
But I still remember that conversation to this day. And maybe, the place that I’ve had to sort of work on, that I reflect on when I think about that conversation is, have high standards. But how do you celebrate more? And for a company that’s 10 years old, I think about, the early days and all the little wins and how if I had to do it over again, I wish I could go back and take more pictures, give more pats on the back, more shout outs.
[37:32.7]
Because it’s so freaking hard in the early days. And you guys know that. And so I think it’s great to have high standards, but how do you, like, celebrate a lot? And, I think as founders, sometimes we’re our own worst critics. But I do think about, having high standards, but also, celebrating as something that is really, really important on the journey.
[37:54.4]
I do think as a, as a CEO, it’s tricky because you always like, there’s like a stack of problems you’re dealing with, and when something good happens, you’re just like, okay, problem number three is gone. But I still have like 1, 2, and 4 to deal with. So, it’s hard to like, just go like, oh, actually this is like a great moment and we should like, stop to recognize.
[38:14.5]
It’s one of the differences when it’s a couple of co founders to a tribe, to a full company, and being the leader of a company or team, it starts to change a little bit when it’s just you and your co founder, you can be tough and disappointed in each other all the time. But I think as the company gets bigger, things change.
[38:34.3]
But I do reflect on that feedback a lot. Yeah, I think the balance, that I think I’ve figured out over time, I didn’t get this right either. I think in the beginning I was very tough on people, because I thought that’s what the best CEOs do.
[38:49.9]
Right? But over time, you realize if you’re tough all the time, people kind of check out also. And, they’re like, nothing is ever good enough. They’re like, this guy, he’s always just not happy. What I figured out what you need to do is you need to do both at the same time.
[39:06.6]
You need to say, hey, hey, we did this really well, but here’s where we need to be next time. If you do that both at the same time, people are more willing to accept the higher standard that you set. And if you miss out on one of them. If you’re only happy, then people also check out to some degree.
[39:24.4]
They’re like, oh, well, job done. Right? But if you’re only disappointed, that’s also bad. So I think kind of doing them both almost at the exact same time and kind of almost marrying them together, I think is a very natural thing to do, very human thing to do. It’s like, yes, we accomplished this goal and now we got another goal, right?
[39:41.4]
And, you know, I think people feel good about it and they feel motivated for the next step. As a founder, what kind of inspires you the most these days? I mentioned the robotic stuff, a lot, and I think,
[39:57.0]
it’s really interesting because I never would have thought 10 years ago, when we were helping, Phil west go find line cooks, that I’d be spending time with companies building robot dishwashers and robot dogs for the warehouse. And that’s really been exciting.
[40:12.2]
One of the founders I’ve been spending time with on my journey around physical AI, is Brendan Iribe, who runs a company called Sesame. But Brendan was a founder and CEO of Oculus, before that and spent some time at Meta. And, Sesame is solving two independently hard problems.
[40:30.0]
They want to be great at voice AI, but they’re also building physical, wearables, that can be, a copilot for us. And it’s like a hardware problem that’s really difficult and a software problem. And I was really impressed when I met. I was at Brendan’s office the other day and knows the intricate details of how much a pair of eyeglasses should weigh, to the gram and the, incredible attention to detail to build great software, but also great hardware, and to kind of be crazy enough to try to build a company that’s awesome in both, has been exciting just kind of as I’ve been on this wandering mission, around robotics.
[41:07.1]
I think this has been great. Thanks, Sumir. This has been great to catch up. Imad, you will not. I hope you don’t forget me next time I see you. I will never forget Sumir. Thanks everyone, for listening. Please leave us a review on whatever channel you’re listening on. Makes a big difference to the algorithm and to the success of the show and see you all next week.
