Marc Lore, who sold two companies for billions, aims to take his food delivery venture Wonder public at a bold $40 billion valuation
Lore and I recently spoke in person in New York about Wonder and its ultimate objective of simplifying meal planning. Additionally, we discussed Lore’s management philosophies. The following is a selection of his remarks regarding the latter matter, which have been mildly edited for clarity and length.
The lore surrounding the so-called “founder mode” is as follows: founders and CEOs actively collaborate with their direct reports and “skip level” employees to prevent small challenges from escalating into major ones.
This approach is employed by Brian Chesky, Jensen Huang of Nvidia, Elon Musk, and Sam Altman, among others.
Yeah, the founder mode concept did not resonate with me, as I operate in a manner distinct from the norm.
I devote considerable attention to vision, capital, and personnel concepts.
We conduct a weekly meeting with the leadership team, during which we allocate two hours to the fundamental components of the vision, strategy, organizational structure, capital plan, performance management systems, compensation systems, behaviors, and values.
These are the elements that you may assume are already established.
You believe that, “Oh, yeah, we have already completed the behaviors.” Valuations have already been achieved. Performance management was implemented.
We have a strategy in place. But when you are expanding and progressing rapidly, it is remarkable how much this changes over time, and you are eager to remain informed about it. and continue to discuss it indefinitely.
When all parties are in agreement and there are exceptional individuals, it is sufficient to allow them to operate autonomously; I am not required to participate.
Therefore, I refrain from engaging in the minutiae of individuals’ actions, provided that they are aware of the subtleties of the strategy and vision.
When you establish a connection with your team, and they establish a connection with their own team, everyone progresses in the same direction.
Lore’s approach to recruiting qualified personnel:
I am extremely passionate about recruiting exceptional individuals. For instance, that is the case for each individual I recruit. I used to believe that it was possible to interview an individual and determine whether or not they were a rock sensation within an hour. I genuinely believed that, and I believe that other individuals do as well.
It is not feasible. I have employed thousands of individuals. In a one-hour interview, it is impossible to determine whether an individual is a rock sensation, and it is common to be manipulated.
Someone speaks a good game, sounds good, says the right things, and has the right experience. However, they do not work out, and you are left wondering why.
I began to revisit the resumes in an effort to establish correlations. What I discovered was that there is a distinct pattern that titans exhibit in their resumes that sets them apart from non-stars.
This does not imply that an individual without a superstar resume cannot be a superstar. I am not privy to those individuals; however, it is acceptable. However, when I observe an individual with an exceptional resume, they are nearly always an exceptional individual.
I am already certain that I am interested in hiring them, and the purpose of the interview is to ensure that I am not overlooking any aspects of their behavior, culture, or values. Our objective is to achieve alignment in these areas.
However, the resume must demonstrate a significant measure of success in each position in which they have worked. This implies that there will be numerous promotions.
It entails remaining at a company for an extended period in order to be promoted, and it is a significant transition when one departs and transitions to another organization. Superstars do not migrate laterally.
The reason they do not transition from a good company to a poor company is that bad companies must offer a higher salary in order to attract talent. Consequently, they may dismiss individuals who are not as talented and are solely motivated by financial gain.
However, when you identify an individual who is in the top 5% and review their resume, it is akin to a series of booms: promotion, promotion, promotion, promotion, promotion, promotion, and then a significant increase – promotion, promotion, huge jump.
Upon receipt of the resume demonstrating a demonstrable level of success, I promptly retrieve it and accord the individual the compensation they require. It is of the utmost importance to me to include that luminary. Additionally, you establish an organization that comprises titans.
It is imperative to implement an appropriate performance management system to ensure that employees are aware of the specific actions required to advance to the next level. Because the superstars are exceedingly highly motivated.
Gen Z is interested in determining the necessary steps to advance to the next level. They desire to be informed and to be promoted every six months.
Lastly, Lore discusses his conviction that a startup’s future can be secured by taking greater risks, even though this approach may appear counterintuitive to many.
The risk of maintaining the status quo is consistently underestimated, while the risk of implementing a change is consistently overestimated. I observe this repeatedly.
In the event that you are diagnosed with a life-threatening medical condition and the doctor informs you that you have six months to live, a trial drug or any other treatment, regardless of its high risk, will appear to be a viable option. You are essentially pursuing opportunities to take a risk in order to avoid the inevitable death.
If you are in excellent health and everything is going well, and someone suggests that you take an experimental substance that may extend your life, many individuals will respond by saying, “You know what? It is excessively hazardous. I am in excellent health. I am not willing to succumb to the effects of this medication.
However, startups are fundamentally distinct from large corporations. At a large corporation such as Walmart, where Lore was responsible for the U.S. e-commerce business after transferring it to one of his companies, incremental improvement is the primary focus. There is no incentive to engage in risky behavior.
It is probable that you will perish as the founder of a startup. It is probable that you will pass away each day that you continue to live and operate this startup. The likelihood of this occurring is 80%, with a mere 20% of it actually transpiring.
Therefore, it is imperative that you consider this when formulating your conclusions. It is imperative to pursue opportunities to take risks in order to mitigate the risk of death. Maintaining the status quo is the most detrimental course of action. The maximum amount of risk that can be incurred is by doing nothing.
