HIBT Lab! Wonder: Marc Lore

It's great to be back.

Absolutely. Yeah. I mean, it was quite challenging, you know, just growing off a big base that quickly. So, you're talking about adding, you know, tens of billions of dollars of revenue over a couple years and uh it required a lot of labor and had to make a lot of hires and it's always challenging to hire great people and keep that standard and that bar really high. That was probably the most challenging piece of it.

Yeah. I mean I think I'm happiest when I'm doing something entrepreneurial building something. I mean it could be inside of a big company building something. It's really about the autonomy to just run and build fast and not have to get, you know, traditional corporate buyin before doing everything because uh corporations, they just tend to shy away from risk and low probability outcomes. Yeah. And I sort of gravitate more toward low probability outcome but massive upside.

Not only experimented with, I basically co-founded half a dozen companies in a really short period of time. Yeah. So, Mojo is one of them. It's a uh sports stock market that's about to launch here in New Jersey for football season. This is where you can actually bet on specific athletes, right? Not teams. Yeah. It's basically you're placing a career bet on a player and you're able to get in and out of that in real time. So imagine if there were one stat like wins above replacement for example in baseball. When that player retires, you'd get paid whatever their wins above replacement is. And so imagine somebody early in their career, you have no idea what the career ending war is going to be. And you could imagine if you're right, you can make a lot of money if you had invested in Tom Brady before he was Tom Brady, right? And that's really the exciting part of this is that there's liquidity. You can get in and out, but there is a intrinsic value created by this stat that makes it very clear whether or not you're going to make money on a particular investment. And it's very different than other claims to be stock market like baseball cards and things like that where you can be right on the player, but the market could go the other way on you. This is it's got intrinsic value. So, we're very excited about it. Um, one is a wizard. It's basically conversational commerce. I think there's a future where people will text what they want instead of going to a website. And so the idea is that businesses could use Wizard to offer a phone number where people could text the business to buy products instead of having to go to the website. Um, another company is uh, Jump, which is a dynamic realtime ticketing exchange where the idea is that any customer or fan, so let's say you go to a Yankee game and you're sitting, you know, 30 rows back and in the eighth inning, somebody uh, leaves the game in the second row, all those seats become available for anyone in the stadium to what we call jump to. Oh, wow. I love that. Yeah. So it's dynamic real time. There's no empty seats in the stadium near the field at any time. So everyone's always jumping. It's a reverse auction. So at some price somebody will jump. And so the idea is that in any venue in any sport, you wouldn't see empty seats cuz that's so frustrating. And you know, I grew up and always was in the sort of bad seats and would try to jump down and find a seat and you'd get kicked out by the usher and things and yeah, always try to move down, get closer and it was always frustrating to see all these empty seats or people leave in the eighth inning and the ushers say no, no, no, you can't go down there. It's like why not? All these seats are open. So the idea is now there's a technology where anyone could jump to any seat and you know the price could be very cheap. So that's one company called Jump. Another's thoughtful, which is an app that enables people to be more thoughtful to their friends, family, and organizes all their ways to be thoughtful, you know, like remembering birthdays and sending gifts and stuff. Birthdays. And also just it's educational in in the sense that you know you might have friends that have a certain religion and on certain days it might prompt you to say hey your friend is Jewish and this holiday is important to them and this is some history about the holiday and this is what you would say to your friend on that day or people that you know going through infertility issues or pregnant and checking in on a friend and it's automated in a way that prompts you with suggested text or things to say. You could obviously edit it, but if you go into the thoughtful app, you can click on each day, then it'll basically send it through your existing text on your phone. So, it's like organizes it really well. And so, every day sort of prompts you ways to be more thoughtful to friends and family based on what you know about them. It could be forest fires in California. It knows that all the friends that live near there that you might want to prompt you to uh send a note to them, check in on them, and see how they're doing. stuff like that.

Wonder was the one that really stood out as having the ability to completely disrupt the entire food and beverage space, which was a massive market. I think the food industry is ripe for disruption and uh you're just looking and thinking about that and then obviously sort of all of us getting tired of food delivery being you know soggy fries and not being able to get you know healthy options like fish and things that don't travel well and paying all those fees and things and just thought younger generations are are putting a higher price on convenience not wanting to cook as much willing to pay a premium for it and I just thought you know what does 2.0 of this food delivery look like? M I don't think 10 years from now people are going to still be satisfied with soggy fries. And so I thought is there a way that you could bring the restaurant to the customer's home so that they had great quality food piping hot without having to pay all those fees. That was the original thinking.

Yeah, we're trying to create the next generation of what it means to be a restaurant chain. So, when we think about a restaurant chain now, it's a brick and mortar. You go to the restaurant. Well, we've built now 20 restaurant chains across all different cuisines and we put it on a mobile platform so that the restaurant actually comes to you, cooks right outside your door very fast in a high-speed convection oven and brings the food piping hot to you. So, I'm talking everything from a steakhouse like Bobby Fle steak at the high end all the way down to burgers and pizza and family style at the lower price points and everything in between. Chinese, Italian, Japanese. We've got sushi nakazawa that we can bring right to your door. Pizzeria Moza from Nancy Silverton. Wow. We've got great chefs like Jose Andreas and Marcus Hamlson. New restaurants coming soon.

Yes, it's much more technology than you might think. So it is a Mercedes Sprinter van. So it's not very big. The one person drives and cooks and brings it to your door. So there's only one person on the truck. So it's on demand cuz some people think you got to order it way in advance. You could go on the app. It'll tell you all 20 restaurants and it'll show you the time that we'd be expected to bring the hot food to your door. And it's usually on average around 30 40 minutes. From the time you place the order, you'll be eating the food. And so that means that the truck is probably 10 minutes away from your door. It pulls up and then cooks the food in, you know, 15 minutes in front of your house. In front of your house. Wow.

Yeah, I mean they do seem to be choosing it. Were you able to order a steak and have it be like it just came out of the oven or fish? Fish doesn't travel well. If you wanted a grilled piece of salmon or a grilled piece of cod, that is the real differentiator.

Yeah. The the other thing to note is that the prices are pretty much exactly what you'd get in that particular restaurant. So if you went to Defa Pizza, it would be the same price. If you went to Bobby Fle steak, the same price. So the prices are not inflated. It's basically without any fees what you would pay in the restaurant. So cheaper than the delivery aggregators and you know delivery companies and you're saving money because there's no overhead. You don't have a max. It's vertically integrated. Yeah, it's vertically integrated. We build these restaurants from the ground up. We've got a central commissary kitchen where we'll suve and park cook the food and put them in kits and then the kits get loaded out onto these trucks and then they're out all night. And the beauty about the model is that the trucks are only 10 minutes away cuz they go customer to customer. They don't have to go back to some location to get the food.

Yeah. More like 15 minutes, though. That's the thing. It's the speed. So if you think about the drive time from one home to another 10 minutes and the cook time 15 minutes that's 25 minutes including driving and cooking that's about the time it takes food delivery company to go to the restaurant pick up the food and bring it to a customer and it's only one person on the truck. So that's how you make the math work.

And we're able to cook a Bobby Fle steak in five minutes.

Because it's it's already suvided in the central commissary.

Yes. If you ate the steak, I mean, you wouldn't be able to tell that you weren't eating it in Bobby Fle's restaurant. In fact, Bobby Fle came to try the steak. Him and and and other chefs as well. They come and they try the food and they say, 'Wow, I feel like I'm eating in my restaurant. This is great, but explain to me how you're going to be able to cook this in a truck.' And then that's when we drop the bomb and say, 'No, that is and was cooked with the push of a button.' Wow. From a truck. And that's when it blows people away.

Yeah. Yeah. I mean that's that's when we really started to get into market. Yeah.

Um I mean total employees about 1,700.

Yeah.

Correct. We're in Essex Union County and just went into Bergen County.

Yeah, all the vans look exactly the same. They're wonder vans because on any night a van could be Bobby Fle or it could be Jose Andreas.

I mean, yeah. Certainly when we started there was a lot of skepticism and we had to prove it, you know, we had to actually just show the chefs the food and the quality. Yeah. And that's what did it, you know.

Yeah, absolutely. I mean, it's it's going really well. You know, the scores we're getting are excellent, outstanding. the repeat rates, you know, people are coming back at a really good clip. Um, you know, close to threequarters of all the customers that try it will come back in the first 60 days. So, that's a really high repeat

rate. The average order value is great. It's in the 70s for a family.

Yeah.

And yeah, it's going great. The penetration continues to increase in Westfield, the first town. We're over 70% household penetration. Wow. So, yeah, customers are trying it and they're coming back and loving it. And we're expanding. We just went into Bergen County, like I said, and in October, we'll be in Westchester County.

And so we'll sous-vide the steak, put it in a water bath, you know, at a perfect temperature and put it into a kit and the kit goes out on the truck and literally from there it is in the high-speed convection oven. Press this button, medium rare, and it'll come out perfect temp every time. Wow. And so even more so than a restaurant, even a great restaurant, there are different chefs and sous chefs cooking and it doesn't always come out exactly the same.

And same with pizzas. I mean, this oven also does pizzas that way. It's not a specific pizza oven. No, it does pizzas the same way. We will par-cook the dough and you'll have the pizza and you won't know that it was cooked in 4 minutes in an oven.

The quality of the food is just what you would expect from the very best restaurants. That's the idea.

Well, given the density in a place like New York City, we wouldn't have to go more than a few blocks from a truck. And so either you can put 20 trucks and have 20 different restaurants in a parking lot and just cook the food and use a runner to bring it three blocks away. That's how dense we expect the orders to be. You can get a fixed location and put the equipment in there and run 20 restaurants out of a 2,000 foot facility. So there's lots of options. It really depends on precise area.

Yeah. We pay people pretty well. So, it's over $20 an hour starting and up from there. Full health benefits. And we also give everyone stock in Wonder. I believe that everybody working at the company should have a piece of ownership. And, you know, want everyone to feel like they could share in the success.

Yes, we have a really robust training program and we found that people really like the idea of learning a new skill and getting out on the road and being able to handle the end to end. A lot of times when you're in a kitchen and you're cooking the food, you're not also serving it to the customer. So people have a lot of pride: they're going to make a meal and they're going to bring it to the door and they're going to see the customer that's eating it, and in many cases they get to know the customers well, and so there's that end-to-end experience that people really appreciate.

That's exactly right. That's what we're doing. Most of the people have had no culinary training, chef training at all. So we put them through a robust program and I've talked personally to many of these chefs on the road, as we call them cores, and many of them, you know, it's a new career path and, like I said, there's definitely some pride in being able to cook food for a family and then see that family firsthand and put a smile on their face. It really means something to folks.

Yeah. Yeah. It's fun. It has to be fun. If it's stressful or if it's not fun, then it's not going to happen. You have to love it.

I absolutely love building something from nothing and seeing it come to fruition.

And you mentioned they're 12 people, Guy, but it's like the primary use case is sort of every day of the week just for a family. It could be two, three, four people. I mean, yeah, the dinner party, it could work for that, but that's not really what it's meant for. It's really meant to be an everyday type of occasion.

Yeah, like you said there, we started in northern New Jersey. We're moving into Westchester. Then we'll roll it out to the rest of the tri-state area and then start exploring new cities and new suburbs around those cities. It's going to take probably, you know, 10 to 15 years to roll it out across the country. It's not something you do in just a couple years. Um, but we also, you know, outside of the mobile restaurants, we do have other adjacent businesses that are simultaneously being built. The big vision is for Wonder to be the go-to solution for mealtime. Anytime you want to eat, breakfast, lunch, and dinner, any price point, any day of the week. And so that means that, you know, it can't be just mobile restaurants pulling up to your door. We need to make meals that are ready to eat and cook in your own oven or even meal kits where on Monday, Tuesday, Wednesday, you're not spending $70. You might want to spend $20. Um, and so we really do want to hit every occasion. And we've already got the customers on the app. And so on a marginal basis it's very profitable to sell other things like meal kits and ready-to-eat meals.

That's it.

Absolutely. Yep.

Yeah. We've just launched 30 ready-to-eat meals which are basically imagine a protein, side, potatoes, and it's in a tin and you basically just take the top off, put it in the oven for 30 minutes and you've got yourself a great meal and we can deliver it fresh same day.

Yeah, it's very capital intensive. You know, it requires many years and a lot of money in food engineering and food science to be able to pull this off. So, by next summer, by July, we'll have 30 restaurant chains, which we believe is around the right number. It's a pretty big moat around the business just to have 30 chains where we've invested tens of millions of dollars in each chain in terms of the R&D and food science as well as all the engineering of the trucks themselves and all the evolution that's happened there and we continue to evolve that every day.

Yeah, it'll be a while before the corporation Wonder is, but the great thing about this model is you can prove profitability in a region and so it's local and so it's very different than a national business where it requires the entire business to get profitable. There's really no such thing as a local part of a national business like an e-commerce. But here you can actually saturate a particular region and show that the economics are profitable and it works. And so that makes it easier for investors to have conviction to expand.

Absolutely. Yeah.

Yeah. One of the big things is, you know, having come from e-commerce where everything's commoditized where you buy a box of diapers from Procter & Gamble, it's the same box. It's like there's no change and you don't expect it to change. With food, it's more dynamic. You can be ordering salmon fillet from a certain purveyor and it's great and then all of a sudden it's not and what happened? You know what changed? Food changes. You know, it depends on the season. It depends on who the purveyor is and you have to be on top of it. And so one of the things that we do that's very unique, I think, to the restaurant world is that we get meal-level feedback from about 20% of our customers. And so they'll tell us, you know, this burger was a nine taste and an eight temperature or this steak was a 10, but it was a seven in portion size, like really detailed feedback and numbers. And every week, I mean, we look at it every day, but every week we have a full-on meeting to go through how the scores for the week changed. And we pick up things all the time, like very quickly like, 'Oh, something happened here. We were like 9.9, 9.9, 9.9 and this week 8.4. What happened?' And you immediately say, 'Oh yeah, they changed the quality of the meat without telling us.' Something like that. And then you very quickly change it. I don't know how restaurants honestly deal with that because it must be so hard without getting that detailed feedback at the customer level. It's hard to know whether something went from a 9.0 taste to an 8.5 or an 8.6 even. You know, it's the small changes that would be hard to figure out. And that's one of the things I really appreciate about food, about how challenging it is to get that right.

I think it comes down to just hiring great people. You know, it's VCP: vision, capital, people. Those are the most important components that I focus on and the vision is constantly evolving. The people piece though is where I spend most of my time because it's really about getting the right organizational structure and hiring the very best people and setting the culture up in a way that gets the very best out of them. You know, so people are motivated to want to give the best they've got. And if you get the best people and you get the very best they've got and they're in the right organizational structure, magical things can happen. And you can do many things simultaneously.

Yes, it is embracing it. It is understanding what the nature of all the potential issues could be and how we're going to scale it and just tackling the highest priority item first and then the next highest priority item and just knocking them down. If you sort of take a step back and look at all the things at once, you'll get overwhelmed by everything that needs to get done. But if you sort of get everything on a piece of paper and start with the highest priority and then you start knocking a couple off and you start feeling like, hey, wait a second, this is doable. Let's just keep knocking these items off and eventually we'll have everything really tight and locked up and you can't waste time. There's no time to waste to worry about the future or dwell on the past. You're going to make mistakes, right? You're going to have do-overs. You're going to go through sometimes you're going to go through a door and you're going to have to turn around and come right back out and you can't dwell on that. I think that's the key, that really separates what it means to be an entrepreneur. You just there's just no time for that. And if you're the kind of person that thinks about a failure or is worried about what might happen or what you have to do in the future and you just even seconds, minutes wasted thinking about that during the day is going to be too much. I like hard businesses. I like businesses that require capital and are hard to execute because if you pull it off, it makes it really difficult to be a copycat, to copy.

I do think that the idea of having to go to a website and search for your product and say, 'I want to buy a toaster.' And you search toaster and you get a long laundry list of toasters and you have to weed through and figure out what toaster you want to buy. I don't think that's the future. I think the future is much more personalized. It's much more fluid using artificial intelligence and texting. I think people would be able to in the future just text what they want and the system would know you as well as your best friend or family member and be able to recommend precisely what you want and either using text or even voice to just acknowledge that and have it delivered without having to do a lot of detailed searches and things. So, I do think it becomes a lot smarter and a lot more conversational. In the way that it's just back and forth. Like if you went into a brick-and-mortar, went into a local Best Buy or something and wanted to buy a TV, you'd have an expert there and you'd have a conversation back and forth. Does it do this? Does it do that? I have this. I need it for this. And having all that knowledge already built in so that you can do that via voice or text and be talking to somebody as knowledgeable as that person but who also knows you as well as your best friend, the merge of the two I think is where we're going, but it's not going to be 10 years. Retail moves a lot slower than that. I think it's probably a 20 year plus before we really start to see that materialize, but it's heading in that direction.

Yeah, artificial intelligence and machine learning by that time should be at a place where it's more commonplace and that's how people will be ordering product.

First of all, I would say it's just fun. It's sheer fun. You only get a certain number of years on this planet and you want to enjoy your time while you're here. And if you can make an impact and have fun at the same time, well, what's better than that? And I do think some of these ideas have the potential to have a positive impact on people in the world. And at the same time, it's super fun, challenging, like you said, to try and pull it off when there's a lot of doubters out there. And also, you know, in any company that I've built, we've hired a decent number of people. And I don't know, I take a lot of pride.

In watching those people's careers grow and learn and develop, and they go on to do amazing things. And so, it's not necessarily just about the company, but it's about all the follow-on effects of building something like that. And in the case of, like you said, these chefs on the road which could potentially be hundreds of thousands if not a million people that have a new career that they're proud of and they too could make an impact on the people that they touch. And so it's no one thing that really drives me. It's sort of a bunch of things.

51. Yep.

I think that's right. My goal is to be the oldest startup founder in history.

Yeah. Yeah. So, when I'm 90, you know, or 95, it would be so fun to do a startup from scratch. Completely from scratch, a new idea and just get out on the road pitching VCs at 95 with the cane and the wheelchair. And you're like 95 and you're like this business won't be profitable for another 20 years.

Thank you, Guy. It was great to be on.