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Karl Munthe-Kaas - Oda

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Operational excellence - with Karl Munthe-Kaas, co-founder and CEO of Oda.

šŸŽµ A new episode out - Oda is NorwayĀ“s largest online grocery store and was founded in 2013 by a group of ten friends, combining skills in software development with traditional lean operations. Oda was valued at Eur 1B Euros in 2021 after raising Eur 265M from Kinnevik AB (investor in Zalando, HelloFresh and Lunar among others), Prosus Ventures, and SoftBank Investment Advisers to expand to Finland and Germany. šŸŽµ

Many thanks to Benjamin Webb from Deliberate PR and the co-founder Christian Mikalsen who helped me get more insights into Karls' strengths as a co-founder and CEO and ask more in depth questions.

Main takeaways:

šŸ’ƒ Having a continuous development mindset is key. Great things are achieved by doing a huge amount of very small tweaks.

šŸ¤ŗ Operational excellence has to permeate across the whole organisation and one of the most important elements is attitude. Your people have to genuinely care about the organisation and that is only possible if you genuinely care about them. This should be visible in salary, benefits and other needs that they might have and a Christmas speech is not enough. šŸ™‚

šŸ‘ļø Be happy and not satisfied. Look at your business and be happy that there are so many improvements that you can do. I highly recommend you listen to the Japanese master story at min 21.

ā¤ļø This was an incredibly honest conversation about the beginnings of Oda and operational excellence that any entrepreneur can learn from. A million thanks to Karl who was generous with his time and shared his story with us.

Transcript - NOT EDITED

SUMMARY KEYWORDS

systems, value chain, warehouse, operational excellence, important, bit, build, euros, grocery, operations, investors, people, technology, picking, fulfilment, market, shuttles, online, commerce, business

SPEAKERS

Calin Fabri, Karl Munthe-Kaas

Calin FabriĀ  00:05

My guest today is Kark Munthe-Kaas, co founder and CEO of ODA. Oda is Norway's largest online grocery store and was founded in 2013 by a group of 10 friends combining skills and software development with traditional lean operations. Oda was valued at 1 billion euros in 2021, after raising 265 million euros from Softbank Kinnevik, and process to expand to fill in in Germany. During this episode, we dive into the market opportunity in Europe and online grocery value chain, the key learnings and tactics for implementing operational excellence in organisation, and the secret sauce of ODA. Carl shares some great lessons throughout the episodes that any intrapreneur can learn from, please enjoy this great conversation with the founder of odour coral moon to cuss. telling me the story of where and how did it all start with odour? And also, if, if this can help you, a Christian told me to ask you about the process of buying the first set of shells for your initial tiny warehouses and how you were very skilled in negotiating with the supplier to get a very good price.

Karl Munthe-KaasĀ  01:41

Yeah, okay. So to take the first part first, and then I'll talk about the shelves, basically, it started with actually a friend of mine was noticing that online grocery was just growing very quickly in the UK. And we just chatted about that over a couple of beers. And then that concept just grew a bit in my mind. And there was two things that I really loved about it. And one is that, you know, fundamentally going to the grocery store is not really a valuable experience. For most people. It's, it's most of the time it's work. And if you have a family and kids and stuff, it's quite inconvenient as well. So obviously there was there was a, I think a market need there, I didn't, I never really doubted the sort of, let's say product market fit. This is something that everyone needs. And it's it will be a huge time saver. The other thing, which I actually really liked about it is that it's logistics logistically, very complex and very complicated. And I have a background from operations at McKinsey. And obviously not the operations team and the leaders are much, much more skilled than I ever was as a consultant at McKinsey, but at least I had some of the background and some of the thinking around that. And I just it was clear to me that, yes, it's complex, but it should be solvable. And it will be extremely valuable if you can really create a new value chain that would just be fundamentally much more efficient than this store, trip and retail structure that we have. So those were the good reasons. And I just I think I just felt that this is a new industry and someone needs to build this industry. And I thought we were as well positioned as anyone else. So then we started working on it. And but it really we worked on it as a as a concept for over a year. And then sometime during that I know that's a question for later as well. But I read lean startup. And it occurred to me that the important parts there was to show value early because it was going to be a massively capital intensive journey anyway. But then the first steps then becomes Can you prove that this could work, or at least in all likelihood could work and lean startup was was important there in seeing Okay, so how can you do that from the very beginning, just raising very small amounts of capital, bootstrapping things showing value and then accelerating the capital raising and all that. And that also led us to, to the realisation that we needed our founding team more than we needed capital. When we found our co founders, right, we were 1010 co founders, three of us was from operations and business and seven was from technology. And that has been probably one of the most important decisions we made, because we sat down let's make the system ourselves it might take a bit longer, but it would give us an actual competitive advantage later. And I think also will still only possibility we saw of making a system that was sufficient enough to do this at sort of mass market or discounted prices. Anyway, so that was that was some of the rationale. And then we got started, you know, with the other 10 founders and then pretty quickly realised we had to get a warehouse and we needed some shelves for that warehouse. It was like a 500 square metre were like half an hour outside of the city. Today we have a 17,000 square metre warehouse next to the city, but at the time, that was what we had the could afford. And we had to buy shells and I remember we were I was negotiating with different shelves. People I was super happy because you know I was able to save 500 euros at the very end last week where I got 5% discount that supplier actually has continued to supply us with a lot of warehouse equipment later for obviously a million So euros and they still talk about how I was hell bent on getting these last 5%. And it was important, then it's important today to negotiate that it's a pretty thin margin business.

Calin FabriĀ  05:10

Yeah, absolutely. Absolutely. And also, you mentioned the value chain, I would suspect that the early trends that you've seen in 2013 have materialised. So I would love if you can describe what was the value chain back then? And how is the value chain at the moment? And what do you foresee for the future.

Karl Munthe-KaasĀ  05:28

So if you look at the sort of components of the value chain, it's, I would say that the overall structure is not that different, but each component is very different. Now already from the beginning, we had our own warehouse. So the value chain was basically you had an upstream logistics, basically a wholesaler that's that got you the products that you will use selling fmcgs. And then you have a warehouse, which was for us was completely manual, where you did all the picking and packing, and then you send it directly to the QA. And that in that value chain is basically the same, although now of course upstream. With massive volumes, you do much more directly. So there are changes in the upstream value chain where you go away from having a wholesaler and over to just direct supply from even from farms or from producers, right, Coca Cola will just send the big truck straight to us, instead of us buying some cases of Coca Cola from a wholesaler. So these these are changes that just happened with scale. And then of course, the warehouse at the time was probably picking with with printout lists where we were checking off items. Now it's a it's an automated system. But it's still a system that that has evolved, of course, in some some leaps and bounds, right. And that journey is definitely not a straight line. But we we were building, building up getting ready to scale at at the early in the early phase, and then we went through a Blitzscaling phase. And then we went over and transitioned over to fully automated or at least as automated as this industry can be right now, there is of course, that will change in the future. For sure. One, one important part is there are still humans picking the items. They're humans putting your item into your box in our warehouse, but also in let's say an Okada warehouse where there's goods demand, and shuttles and so on, there's also still one person putting the item in the box eventually. But this will probably change into more robotic arms and so on. But this is a ever evolving space. But of course, the systems that we have now are more than double three, even four times more efficient than what we used to have. So for one labour hour now, we get much more production than what we have. And then finally, of course, you have the home delivery side, we actually used to have some home delivery and some mobile pickup points. And then we scrapped the mobile pickup points actually, like last year, after seeing the ratio everyone was picked, it was Tuesday home delivery. And that also means that the scale effects of home delivery are obviously very strong. And so once you start getting high volumes there, the costs also dropped for home delivery, whereas the costs for the pickup points are more stable so that there's some sort of cost convergence, where eventually the cost between us delivering it to your door and us delivering it to pick a point was very similar. And then customers clearly preferred the home delivery. So instead of having kind of some legacy, and we just streamline the distribution side, so now we're fully 100% home delivery. So still the same and which differs from for example, what some players even back then right like Instacart would build a value chain on top of the store system that is very different in structure. And we've had more of the same structure, but each component have been dramatically improved

Calin FabriĀ  08:37

and going forward, like how do you make sure that you implement all the efficiencies that come within the industries across the segments in the value chain?

Karl Munthe-KaasĀ  08:48

Yeah, so we we've always made this development ourselves that we're of course utilising technology that is being developed, whether it's restocking and restocking systems, for example, we can use that way that we have a backbone of a conveyor based automation, which we have designed entirely ourselves that has been continued to develop but mostly internally, of course, we have seen developments in sort of large goods to man fulfilment, centres, micro fulfilment, there's you know, there always has been a lot of different ways logistically to do the picking. What has existed for a very long time is the shuttles right like big shelves and the shuttles are bringing the goods to the person that comes to our store Ocado systems which shuttles driving on top. Now we have a lot of microfilm and centres where you have shuttles driving on the floor with shelves above there are a lot of those systems. Fundamentally though the problem with all of them especially the goods to man is tend to be extremely complex heavy per labour hour. So for every station that you have a person's picking on the station, you need a very large amount of the shuttles in order to keep that person okay pile and those shuttles tend to be quite expensive. And the systems become very expensive. And you have large fulfilment centres that are forced can be 7080, or even 100 million euros. And then you have microfilament. But they are basically just large systems scaled down, right, they're still the same, roughly the same capex cost per picker, if you understand. So whether you have 100, picking picking stations and a huge system, or five picking stations and a smaller system, the small system, unfortunately, is still relatively expensive. And we've noticed, we have discovered that we can actually reach higher OPEX efficiency without the use of those shuttles. And that's our secret sauce,

Calin FabriĀ  10:39

or no, now we've told it to others a lot of details that I didn't. Do you mentioned several times actually starting from the first principles and designing it yourself, for example, the conveyor belt, how did you reason the decision between buy and build.

Karl Munthe-KaasĀ  10:55

So just at the time, when we started in 2013, we did look at what we could buy. So it wasn't we didn't say just dogmatically that look, we just have to build it ourselves. That being said, though, I think you can be pretty dogmatic. There are of course, situations where you're an idiot, if you just don't buy this off the shelf stuff, that's three times more efficient than you can ever develop in the next sort of 10 years. That was not the case with online grocery, the systems that were available at the time, most of it was old. Pallet picking systems where you used trucks, basically, and you had picked by voice, you had some pick by line, but none of it was particularly efficient. And I in terms of operational philosophy, it's as a sort of a lean operations guy, right, you have to have a continuous development. And if you buy it, third party systems, the iterations, you can, of course change other things you can might maybe change your processes, but sometimes you'll just hit this wall of while you can't make these changes unless you change your technology. And if you have third party systems that tend to be extremely difficult, and you have processes where you have to discuss it with your provider, and it just doesn't happen. So we had that belief, fundamentally, we were looking for a third party systems say, Look, can we combine this, it just wasn't impressive, the picking speeds were too slow, systems were old. So we felt that we have to build this if we're gonna have a shot in remember this. Our vision was to do this at discounted prices. And it's a bit of an important thing. So it's almost like a build to cost type of philosophy here, because I think online grocery is great. It's super time saving. But what I feel a lot of people are completely under estimating is how insanely price sensitive groceries are. I mean, we talked about these like quick Commerce Guys, right, and they have 2025 30% markup over discounters. That's great, I actually use those two in combination. But I think my usage of it is quite descriptive once or twice, let's say every three, four or five days, there's a big van that comes in with eight boxes of food, I have four kids. So it's a lots of food. And this guy comes in with a three and a half tonne truck, which I know is filled to the rafters with food and he carries it out. And then like twice a week, there's a guy from Fedora who brings me like a bag like this size with four or five items that I needed. The two are great, like I want quick commerce to grow. Because it's super complimentary, when I'm missing a couple of items, that's the way that problem should be solved. But for my weekly shopping, and for the weekly shopping of middle class and working class families, there is no option in paying 25% Extra, that just won't happen. And we and I think felt that this is possible to do at discounted prices. And if you do that's a true disruption. And it's not just the difference, you save money by going to the store or you do online as a premium service, then you're actually able to beat the stores, if you can get the price down, you're able to beat the stores on what price selection quality, and you get this old time saver, a time saving element. And that's I think the key to actually making this really disruptive, then you get all the volumes to do it efficiently as well.

Calin FabriĀ  13:59

So you don't try just to build a faster bike. So then you're at home in 10 minutes instead of exactly.

Karl Munthe-KaasĀ  14:04

And it was just clear that these third party systems could never take us there. If that would have been I think if we had ended up with that would be resignation, that would be saying, Okay, fine. We'll just do this as a high end service. And we'll get a small market share. But that wasn't what we want. So

Calin FabriĀ  14:18

the next question that ties in the difference that you just discussed at the moment. So there are some investors criticising the chase of grocery delivery startups by other investors. And also, as you describe now and also in your sifted interview, there is a big difference between these companies. So do you think that the criticism comes from a lack of understanding of the market or is it partially true on some segments?

Karl Munthe-KaasĀ  14:39

I think it's both. First of all, I think it's important, which I don't think most investors do, especially in the big VC investors are very aware of the differences here between the different models and and some of them are also making bets in both camps. I think, overall, what what we're seeing is just that it's it seems clear and now it's up clearer and clearer, I think it was clear to a lot of investors a few years ago, and I was clear to even more, that there will be this massive transition in fashion or electronics, a lot of the transition has happened, I think there's still a lot of transition left, in fact, and I happen to think that online grocery will be key to further advance other retail online as well, because you're building a new infrastructure, which is much more convenient for the customer. It's also much cheaper logistically to eventually merge groceries with other stuff, but that's a different area. So I think they of course, with their bet on Zalando, they had seen this transition in fashion. And then they were clear that this will happen in grocery as well, it's just a matter of finding the right operation model, then I think with COVID, everything things really accelerated. And then a lot of investors were clear that this is a massive market, we're entering Germany, now it's a 250 billion euro market, right, just there. Even Norway is a 20 billion euro market. So once they start to transition, it's just so such massive volumes. And then in that you have you have the Instacart model, they're obviously doing amazing like doubling their valuation like $40 billion. Now, you get it, but then you get all this, the gorillas vault and so on. I personally believe that, of course, there'll be market in that segment as well. I don't know if these valuations are too high or what to me, it's, of course, a bit surprising that you can get massive valuations with almost no experience, just a couple of years, we've been working on this really doing the groundwork on the operation. And it takes time, it's technology development, it's hardware investments. So that of course, that might seem a bit odd. But I'm not going to make the same mistake that a lot of investors have done with us, which is just look at this from the outside, you have to really understand this business, you have to look at the unit economics of these businesses. And if it's the case that the gorillas and the flinx, and they get theirs, have great unit economics, and are simply just dependent on scale. That is a great recipe for great businesses and great returns on investment, because then you have a true sort of natural monopoly almost, or at least very heavy scale effects, which is what you're looking for. I know that is the case for us, right. So our contribution margin is very high, we just we were just able to now cover all our fixed costs with our sort of profits from contribution from the core business. So that means we're breakeven now, but that means that the future growth, of course, won't have the same fixed cost elements. So that will be very profitable, and from the outside, but if you don't realise that there are these massive scale effects, it looks crazy, because it looks like your sales are going up, you're in for the first few years, our losses were mounting as our sales grew. But that was not because we were losing money on each order. It was because we're building up fixed costs to really bring the operational costs down. And then once that's turned around, you see the losses reducing and, and profits rising. And then you have that's what you want to see. But this looks, it's hard to see that's what's going to happen, right one when you just see the first half of that curve. But But if investors are, you know, do their do their job, basically, and looked at the details, it could be clear, and I've seen some unit economics from some of these players. That was not that impressive to me. But I'm sure that they do things differently, I know that we have completely different contribution margin than other players in our same industry. So I think just slicing them, combing them with one column, as we say, in Norway, but treating them all the same would be a mistake. So I think you have to look at the individual companies. But all this being said, Of course, I find it a little bit strange that you have these insane valuations in quick commerce and massive amounts of capital going to that segment, which I you know, what 2025, or even 30% markup in my mind that can never really be more than 10%, maybe 15% or something of the total market. Whereas you have on the remaining 85%, you have complete disruption with these fully integrated value chains like ours, where you get all the benefit from centralising a huge warehouse and we have no waste. We have saved lots of money upstream, we have automated fulfilment. So you do it very efficiently. And then actually, one this is a very common, I think mistake is that people think that decentralised models have lower distribution costs than centralised models, I can understand that. You can think that because you feel like if you're closer to the customer, that must mean the distribution is faster. And when you look at the quick Commerce Guys, almost all of them do back and forth, right? So it's sort of comparing Well, it's faster to have short distances to the customer, but you will go back and forth to each customer. Or do you put 35 orders in one truck, drive for 15 minutes and then do lots and lots of orders circles together. And at the moment, even in Oslo, which is not a Super Density. We're at two and a half, three minutes driving time between customers. You can't really beat that right? If you go back and forth. You're going to spend 510 minutes going back and forth there and then already you're much much lower drops per hour and From what I understand quick commerce players tend to be in three drops per hour. That is, I can share my numbers, but they don't compare. So that means that like with centralised distribution, you're going to do more drops per hour and you're going to do more picking efficiently and you get all the savings from not having any waste. I mean, that will never ever be overtaken. Even if you do super efficient micro fulfilment automate the decentralised structures, you can compete with centralised on that. But what you have, of course is time, right? So you can do it faster. And we could never do 30 minute delivery, what we can do is we can do an hour, we can do 90 minutes, and we can do that very efficiently. But there is of course, a space where if the use case is the I need it right now, and I'm willing to pay for it. Yeah, then decentralised is the way to go. But I just don't think that's going to win the whole market. So that's a bit strange to me, there should be a massive inflow of capital now to fully integrate the online grocery, because that's gonna change a lot. Yeah. So this

Calin FabriĀ  20:59

reminds me a little bit, I don't know, if you if you had opportunity to read a cable cowboy, Josh Malone. And when he implemented the fibre infrastructure in the US and how he was not aiming to have a profit, because also then you pay a lot of taxes, but he just knew that he builds he's going to build the infrastructure for the flow of information. So for a couple of years, like everyone said, No, this is not a good business, but then all the information would flow on the fibre. So it seems that also you're building that type that sort of infrastructure.

Karl Munthe-KaasĀ  21:31

Yeah. Thanks. That was a great layup. That is exactly what we're thinking. So we this is, again, this is not a niche service. We're building infrastructure here. And if you look at just take Germany, as an example, this is just back of the envelope, but 250 billion euro market, at least 10% is going to go online, UK it's a 13 already. So it's going to be more than 10. But let's just say 10%, that's 25 billion euros. So these fulfilment centres that typically operated like somewhere between 250 300 million euro, so let's say 250, for a sake of argument, that's 100 fulfilment centres that someone needs to build 100 centralised fulfilment centres of fairly large scale just to address the market, that's a pretty high density, then you're going to have very few people is going to live more than half an hour away from from one of these fulfilment centres, and someone needs to build them, and they need to build efficiently. And I don't think you could demand shuttles or cargo systems can really do that it becomes it's going to spend 100 million euros per site, that's too much. But so the key here is building them, a lot of them fast and at low capex and finding the right right balance there. And the great thing now is that actually, we don't really need to balance because it's lower capex and it's lower OpEx. And that's, I think that's why Softbank and process decided to bet on us in this segment.

Calin FabriĀ  22:48

Yeah, absolutely. It definitely makes sense. Just to change gears here a little bit and discuss maybe strategy and operational excellence. Eisenhower famously said that plans are useless. But planning is indispensable. So how do you set the strategy for order? And how do you actually follow through? How do you look at operational excellence in particular, as you operate in a very complex market?

Karl Munthe-KaasĀ  23:13

Yeah, so you have the classic of a six sigma s and way of manufacturing and so on. This is this is sort of the base. That's what we're all trained as operations consultants, and, and a lot of those frameworks are extremely powerful. And it's the skill set, I think the most important is this understanding of continuous development and celebrating improvement over a sort of achievement. My my chief operations officer has this happy, not satisfied quote that he uses all the time. And actually, I think I'll tell the story that he told me it's brief, brief, funny, he he was training and how this Japanese lien master, which was coaching him, he went to Japan and learn a lot about sort of techniques and so on. And then this Japanese master came over to his plant at the time to go and look at it. And he was walking around together and on the shop floor, looking at all the machines and systems and so on. And he just walked around, and other than and they came at the end. And he and this Japanese master looked up with Andre, my chief operations officer and said, Andre, you must be so happy, you have so much potential. So Andre, did the same thing to me. He was walking around my warehouse, and then it does this before we actually joined the team. And he said the same thing. And then at the end of his trip to my warehouse, he told me that story, I think, certainly saying that, Carl, I have I had reasons to be very happy as well, because I had so much potential, but it's a great, it's a really great thing. And actually, it's also very important when you have these records, right to not be condemned. And when I walk out the warehouse, I know that we have world record efficiency, and I still look at all the potential that's left and that does excite me right? But that is the fun. That is the fun stuff that's brainstorming about How we can do things better. And this is, of course, at this point, that's not me doing this. It's the whole operations team. And not to mention, it's also the actual it's the operators, this is shift leaders. And that's I think I alluded to it a little bit in the beginning. But having a true continuous development mindset is pretty broad. It also means that you have to treat your colleagues well, right, we collaborate with unions, we pay fair wages, because at the end, they the nature of continuous improvement is doing huge amounts of very small tweaks. And ideally, you do them in your limb in the shop for management, but you also do them in the technology, and we do it in the hardware and in the software. And to get the ideas and to get for the engineers to make these changes and make the right changes, they need the input from other people actually working in the system. And this is why I don't think that buying a third party system will ever really work. It can work in some settings for very sort of simple stuff, if it's not very important, but for your for your core business. And for us where the up ah, the pickings be. And the number of items that we produce per hour is such an important number. If you go from 100 new patients to a new page, you pretty much cut your costs in half. And I can say that just doing that actually cuts costs by several times the total profits of typical retailers. So it's just everything. And then you can't just set that out to some third party because you won't get these iterations, you won't engage your employees because they'll meet these barriers that they can change, suddenly, they'll make like we shouldn't do it like this. So this provider, this is how the technology works. With us, it's okay, then we see how we can change that technology. So having this engaged workforce and treating them well. And that I think is also a bit of a Nordic heritage, we've always been highly unionised wage levels are very similar. There's not a huge difference between the average industry workers wage and CEO wages are sort of course, some differences but very small compared to other countries. And so I think all of these things tend to work together. And if you control all your means of production, that you have the six M's of production, man method, materials measurements on only one, you don't really change this mother nature's it's the sixth one, but least five of the six, you need to control them and one of them is machine right. And in a lot of situations operational situation, you might not actually control the machine. And then it's hard, but we control the machine, we control technology. And then that's that's what enables us to continuously improve

Calin FabriĀ  27:21

one of the one of the ways that you can achieve operational excellence in my notes in preparation for this episode, it was actually the Shingo model. And the first principle it has 10 principles. But the first principle is respect every individual because it says to have operational excellence, it's also quite a bit of about attitude. And also attitude touches a little bit on culture. Tell me how do you think about operational excellence? And how do you maintain that type of operational excellence growing from 10 people or 15? To 550? Yeah,

Karl Munthe-KaasĀ  27:54

I think you need to this needs to permeate every level. So we do training on the on the shift leaders, the team leaders, we emphasise the fact that when you work in when you work in a line production environment, it's you can't just by one person necessarily working faster or harder doesn't really change, total output. So you actually have to work together to get better results. But I think that the point there is that if when most of the first of all, implementing any change will require the buy in for the people working in the system. And also discovering potential comes to largely Central. So from the line and if people don't actually care about the business, or care about how things go or care about being world class, or I think a lot of the motivation here lies in the fact that the people at the at the warehouse, they're in Oslo, they know that they are a lighthouse for the rest of the systems that will be built around the world. And that I think is very motivating. No matter where you are in the production. Knowing that you're part of something world class is great. That's it, it's something that gives you a sense of bigger than bigger than you create something bigger than the sum of the parts, basically. And if you have that motivation, that's when the great ideas come. And that's also when great ideas are implemented well. So I don't think it's possible to if that, by the way, I mean, not to dig on the quick commerce people, but it's harder in a gig economy to get these types of dynamics. So we focus on fixed positions long term with unionised wages, full shifts, we don't do we don't give you two hours of work on the day you work a full shift when you come to work. And those things I think, is what's sustainable over time, and also creates this situation where you're competing on efficiency and not in your ability to undercut wages, for example, which can maybe work in the short term, but it's not very sustainable over time. And we see you see a lot of liquid commerce players have problems in that area. And ending I would like to ask you some rapid fire questions.

Calin FabriĀ  29:49

So what do you think are three things that you recommend to entrepreneurs wanting to build an operational excellence team, or standard or plant some learning So do you think everyone building a company can take away from your journey?

Karl Munthe-KaasĀ  30:05

Yeah, so I think some of the stories we talked about covers that, but I think we have been satisfied, I think celebrate improvement over achievement, the story with being happy about the potential, that's one, I think. So this is basically summing up. So that's, that's one, I think the other is, again, try to control as much of the production environment as you can, if it's possible, and build your own technology, because in an operational environment, you need to be able to iterate. And that's very difficult with third party systems. And then I think, thirdly, in order for all of this to work, if you're going to do these iterations, people actually have to care about the success of the business. And then I think you as a leader, and as an entrepreneur, and your leaders, you have to actually genuinely care about people. And that's that that can't just be something you have in the Christmas speech, right? You have to actually show it by by trying to create a good work environment, investing in paying fair wages and so on.

Calin FabriĀ  30:54

Got it. I feel there's a whole episode only on that. But tell me best book that you have read in the last six months, and then most impactful book ever?

Karl Munthe-KaasĀ  31:07

I think, yeah. So last book that I'm reading, actually, I'm almost finishing it now with The Everything Store. I like just reading stories about entrepreneurs. It's not, it's not all applicable, but some of it is applicable. And it's a true story. So trying to synthesise can sometimes miss. So the story is always interesting to read. That's the last six months. And I think two books if I can, if I may, two books that have made a big difference to me is one is Thinking Fast and Slow. By Daniel Kahneman. I know it's a well read book, but it's just great in really recognising your own biases. So for me, I think it's important to to see that of course, I have biases like everyone else and try to try to not trick yourself. Right. And the other I mentioned it earlier, but I it's the Lean Startup, which was just very important in I think kicking off and seeing how we could lay down the first very first bricks, this strategy is great vision is great. But you have to be able to break it down, you have to figure out okay, great, it's gonna be a massive transition to online grocery, what do we do tomorrow, Lean Startup, as I think breaks it down a bit for you and reminds you of what is important to show early. And then once you get off to a good start, then things can accelerate

Calin FabriĀ  32:18

exactly the iterative process and bringing value early on, for the most part for investors, or an intrapreneur that you have met and admire and why

Karl Munthe-KaasĀ  32:30

I'm gonna be a bit boring, and I can't speak for everything that the guy does. But there are some aspects of Elon Musk that I just have to bring up that instead of it's well known. So I'll just, I'll just tell the story that made a difference to me, because I haven't met him. But I went to South by Southwest in 2012. And I saw him talk about the SpaceX journey. And at the time, what really made it it made an impact on me, it was how matter of factly he was talking about what they were going to do. And how he was again, just breaking things down. It was saying, eventually, if species going to survive, we have to find more planets to colonise. Okay, that's a pretty that's out there. And it's like, okay, and then. So to get to other planets, we have to, we have to start by going to Mars, to go to Mars, we have to transport things cost efficiently into space. And in order to transport stuff into space in a cost efficient way, we can throw away the rocket every time we use it, that would be like flying to from Paris to New York and just scrapping the jumbo jet every time. So you can do that. So then we need to have a rocket that's reusable. So that means we need to be able to have a rocket that can take off and land. That's what we built. And then they show the video first time they were able to take a rocket lifted off, it just flew it was just like, probably 20 metres in the air or something. But he just flew up 20 metres and then landed. And that was the first step. And of course, I know that there's a lot of steps to get to there. But it was just him just breaking this down. Just a reminder that doing really great things means doing a lot of small things. And it's also this the confidence and the matter of fact, way that he spoke about it super inspiring, right? Because I think you have to have that confidence to him. It was just like, it was almost like it was yeah, it was almost banal, in a way like he was just breaking it down. Like, of course, you have to do it this way, kind of thing. And that's pretty cool. I think if you think about that, I think it's a matter of having both the long term perspective and being able to break that down. That's pretty key.

Calin FabriĀ  34:21

Exactly know, how do we make more Elance we have to learn how to make more Elance.

Karl Munthe-KaasĀ  34:27

He's one of a kind. You can definitely be inspired by some of his personality traits, I think. Absolutely.

Calin FabriĀ  34:33

I think he's Thomas Edison of of our time. Anything that you think it's important to share that we haven't covered yet? I think we've covered quite a lot of ground. Sounds good any ask for from the audience, Carl?

Karl Munthe-KaasĀ  34:45

Yeah, buy your food online. I think if you want to help in building these new infrastructures, be early adopters, right? Because at the end of the day, this is this is scale. It's a matter of scale, a small scale online e grocery into structure will not work a large scale, e grocery infrastructure will be completely disruptive and will be much more efficient and create much more value, the physical retail store structure. And the difference between the two is customers. And I think everyone can do their part in, in just trying these new services out. I know that the reason we are here is we can talk about the operational excellence and technology. But at the end of the day, there were some customers that use our service when it was not a great service. But I think it solved some problems for them. I don't think it was just altruistic that they were using us. But at the time, it was a time saver, but it was expensive. And it was poor selection. And they lived with that. And I think a lot of them knew that, well, let's just use it and it will improve. And that's exactly what happened. So it's a matter of being there's not those videos where one person dances and then the other comes up and dance with them. Be that guy be the guy that like dances with the other guy dancing, so just get on board and bring the volume and then we'll bring the efficiency.

Calin FabriĀ  35:58

Love it. So for our audience if you want to build the future, be an early adopter. Thank you. Thank you very much, Carl, very much. Appreciate it for you taking the time

Karl Munthe-KaasĀ  36:08

not a problem at all. pleasure talking to you.