Dominik Richter: You Only Have Two Options With VC Funding | E1089

1. 0:00 – 0:48

   Intro

   1. DRDominik Richter0:00

      When you raise a little venture capital, you need to make a decision: Are you gonna sell that company, or are you gonna take it public? Personally, my view is-

   2. NANarrator0:07

      (air horn blowing)

   3. DRDominik Richter0:07

      ... if you have grown up as a company in Europe and you go to the US, you definitely need to throw overboard a lot of the things that you feel that you have learned.

   4. HSHarry Stebbings0:16

      What do you need to throw overboard?

   5. DRDominik Richter0:17

      Everything that you know about competition will be 10X what you'll find in the US.

   6. HSHarry Stebbings0:21

      What are one or two of the biggest (beep) ups that you made in the early years?

   7. DRDominik Richter0:25

      I remember one very vividly which was...

   8. HSHarry Stebbings0:30

      Dominic, I am so excited for this. I have many great things from Harley, from Nico, from Jeff. So thank you so much for joining me today.

   9. DRDominik Richter0:37

      Harry, it's great to be here.

   10. HSHarry Stebbings0:38

       Now, I would love to start, I always find it fascinating going back to childhood, what did you want to be when you were a child when you grew up? Let's just start there. I know it's weird but just bear with

2. 0:48 – 2:04

   Early Aspirations: From Football to Business

   1. HSHarry Stebbings0:48

      me.

   2. DRDominik Richter0:48

      I probably had the dream that many young kids have, I always wanted to become a footballer. And, uh-

   3. HSHarry Stebbings0:54

      (laughs)

   4. DRDominik Richter0:54

      ... that's what I did most of my youth basically playing football each and every day. I played academy football, always dreamed of being a professional footballer and at some point basically figured that the chances of getting there are very, very slim and then pivoted towards university and the boring path of, uh, becoming a professional.

   5. HSHarry Stebbings1:14

      I have a theory that athletes make some of the best entrepreneurs though because of two things, which is consistency and discipline, both required to be very, very good at sport, and then competition as well. Do you think there's a lot actually you carried with you from the intense sporting football competition to entrepreneurship?

   6. DRDominik Richter1:32

      Absolutely. I think, uh, it's been, it's been a lot of lessons and also painful lessons that you get, that you get taught. When you get left out of the team, when you don't agree with th- the manager, when you don't agree with some of your teammates and then being able to absorb that maybe you don't shut up, go to bed and next day kind of like, uh, go back onto the pitch and really trying to make the best and, uh, not have anybody notice how sad you are or sort of like how much that worries you, I think that is, like, a key lesson that you learn very,

3. 2:04 – 3:08

   Transition from Sports to Goldman Sachs

   1. DRDominik Richter2:04

      very early on.

   2. HSHarry Stebbings2:04

      (laughs) Yeah, it is. Uh, I never quite managed to, uh, hold back my disapproval with the manager, so maybe that's why I wasn't a good team player. I, I have to ask then, okay, so we pivot away from football and decide that we're gonna go to Goldman Sachs. Talk to me. How did that happen? I'm just intrigued.

   3. DRDominik Richter2:21

      That was a mistake on my side. I'm still always fascinated how good some of the big banks and the consulting firms are to lure in top talent because if you're being honest, the job is pretty boring. Um, nonetheless, I think they attract, like, a huge deal of world-class talent each and every year. And in the end, I think that all comes down to marketing, they're just really good at marketing and at branding their places as these are the most desirable places where you should go if you're a top graduate. I have not been immune to resisting that and so I also ended up there but figured very quickly that it's probably not the right place for me. So after about nine month, I already left. So I'm not sure you can, you can call me a banker or anything like that, I think that was basically training

4. 3:08 – 5:35

   Founding HelloFresh

   1. DRDominik Richter3:08

      and then I left.

   2. HSHarry Stebbings3:08

      I mean, it's longer than I spent at university, so at least you can tap yourself on the back for that. How does HelloFresh come about then? When was that? I'm gonna spend the rest of my life, or a considerable chunk of it changing the way we eat.

   3. DRDominik Richter3:21

      Already at university I had, you know, a little void to fill. There was, uh, something of being an athlete and then kind of like ditching that career and focusing on something different, and I was always fascinated by entrepreneurship. I think the one thing that, uh, also throughout my childhood I always figured sort of, like, "I wanna run things. I wanna be at the helm of things, I wanna invent things, I wanna run a business, I wanna be the one making decisions." So I always had that type of drive of, uh, being my own boss and deciding about my own destiny, and already at university I became very active in all of the different entrepreneurship groups. I started two businesses on the side, uh, during university, um, without funding basically with some of our own funds and with free interns to do all of the work, um, alongside myself and a friend. But those were some great experiences and it was pretty clear to me that I eventually want to start my own firm. So after that short excourses to Goldman, um, I kind of, like, uh, was moved back on track and starting, starting that business. So what I did is actually move to Berlin which was back then, um, I think up and coming, very different from what it is right now. I think generally European tech was up and coming. That was back in, in 2011. So in 2011 arrived in Berlin, um, little money in my pockets, just, uh, spent a year, uh, first working sort of like in banking and then for three or four months traveling around the world, and basically got, uh, together two of my smartest friends that I met throughout university. And, uh, we said, "You know, we wanna start something." And we wanted to figure, uh, we wanted to settle on something that we have a big passion for because that, to me, was one of the key lessons I learned when starting my, my side hustles at university that you should be doing something that you're really passionate about because you're always gonna hit some rough, some rough stretches and, uh, it's way easier to get out of bed in the morning when you have a rough stretch when actually you're very, very passionate about what you're doing.

   4. HSHarry Stebbings5:22

      So I have this, uh, theory which gets me in trouble a lot in the investing business that we have which is I like to invest in second time founders 'cause I think that there are so many fuck ups that one makes the first time (laughs) that you can avoid the second

5. 5:35 – 7:32

   Early Challenges at HelloFresh

   1. HSHarry Stebbings5:35

      time. When you go back to deciding to start that business around a passion point, what are one or two of the biggest fuck ups (laughs) that you made in the early years that you would change or would advise yourself about with the knowledge that you have now?

   2. DRDominik Richter5:49

      We were definitely very naive in the beginning and I think if you had talked to industry experts whether that's industry experts in a CPG company, in a direct-to-consumer company even though that concept didn't really exist back then, or at a, at a supermarket, at a, at another food company, they all would've told you how complex it is to ship perishables, how complex it actually is to run fulfillment, to run a supply chain at scale, to get growth marketing right. So all of the things that we didn't know I think were actually very, very good we didn't know them because otherwise we would've never started that business. And in terms of fuck ups, I think, I mean, there are a lot. I think the, the history of HelloFresh especially in the first 18 months is, like, plastered with, uh, with fuck ups and things that we learned.

   3. HSHarry Stebbings6:38

      What was the biggest?

   4. DRDominik Richter6:39

      I remember one very vividly which was...... I think we had a new record week, we had to source, I don't know the number any longer, but something like 10,000 potatoes. And you-

   5. HSHarry Stebbings6:50

      (clears throat)

   6. DRDominik Richter6:50

      ... actually source 10,000 potatoes which is, like, two big truck loads, and then the trucks actually collapsed, and, uh, a highway was actually (laughs) closed down because our trucks collapsed, and the whole highway was full of potatoes. So we couldn't deliver any customers. It was a huge deal basically, um, making sure the firemen came, they closed off the streets, they did all of these things just because, like, we had no idea how to ship potatoes. A truck broke down, we had no idea whether that's the right trucking company or not, probably chose the wrong one. That was very early on, fortunately. I think, uh, these things are probably, like, 11, 12 years behind us now. But this was definitely (laughs) one that I remembered very, very vividly.

6. 7:32 – 11:10

   Building Moats and Solving Complex Problems

   1. DRDominik Richter7:32

   2. HSHarry Stebbings7:32

      Do you ever look and think, "God, I didn't choose an easy business." And I mean that nicely, but, like, you know, shipping SaaS is a lot easier than sourcing potatoes, shipping potatoes across a country. I mean, you did pick a bloody hard business.

   3. DRDominik Richter7:48

      So it's maybe a contrarian view and I think a view that sometimes in the investor community is not much appreciated-

   4. HSHarry Stebbings7:55

      (laughs)

   5. DRDominik Richter7:55

      ... but I like hard businesses. I like complex businesses. Because-

   6. HSHarry Stebbings8:00

      Why?

   7. DRDominik Richter8:00

      ... the thing is if you figure them out, you create really big competitive moats. And that's because number one, you figured something out that is hard, that is complex, and you make it work, and that means that everybody else who wants to figure that out needs to work equally as hard. Plus you have a head start. You've figured something out and you're already working on the next thing. So I always feel like if you're working on a complex business, and you solve something, then you're actually creating moats that are so hard to overcome, plus you have the advantage of time that you can then use to your own advantage. So I think, uh, that all compounds over time, and when you think about moats, right, in the beginning of a category, everybody starts from a blank sheet. Nobody has any moats. If you're starting in a hard category, and you're figuring something out, number one, you'll probably have less competition in the beginning. Number two, as you're figuring things out, you're creating moats. And then number three, kind of, like, you have a head start, so when your competition is figuring out what you've already figured out, you're already working on the next thing, and these things compound so much over time that then when a category like ours is now more than a decade old, we had a decade to solve some of the most complex problems here. Now, if I look at that from the outside, it would be absolute insanity to launch a competitor to us as of today, given that for 10 years, we worked through a lot of these complex problems. So that's why I like complex business model and complex problems. I think they're very often much more sustainable in the long run, and they also attract a lot less competition.

   8. HSHarry Stebbings9:35

      So what would you say then to Wall Street, to investors, to analysts who do have this negative perception? What do you say to them to be like, "No, no, no, no, you get it wrong. This is why it's great." (laughs) Like, what are the most complex problems you think you've solved?

   9. DRDominik Richter9:49

      I think, you know, over time, the type of business that we run, you really need to build a lot of different muscles. We talked about being an athlete before. So if you're an athlete, you have a number of muscles, and if just one of your muscles doesn't work very well, kind of, like, you're not an athlete, you're an injured athlete, and you're on the bench, like, you can't perform-

   10. HSHarry Stebbings10:08

       (laughs)

   11. DRDominik Richter10:09

       ... and it's a little bit the same with our business, right? You need to be world-class, you need to build muscles in a lot of different dimensions. You need to be very good at building a brand, you need to be very good at building your last-mile logistics network, you need to be very good at s- um, eh, establishing all of your suppliers, and your supplier relationships, and those integrations. We're running 42 different fulfillment centers with heavy automation in those fulfillment centers around the world. You need to scale up your operation and basically run people, and processes, and technology at scale. So all of these are, you know, in a way, muscles that I think we have built to pretty big muscles these days. That helps us also going into new business verticals, like we have done more recently with a couple of others that we've launched, but in the end, I think these muscles are pretty strong and these are real competitive moats. And we've always had some competitors that were also developing some of these muscles, but I think in the end, it's the sum total that you need to really be successful.

7. 11:10 – 16:29

   Competitor Strategy and Unique Approaches

   1. DRDominik Richter11:10

   2. HSHarry Stebbings11:10

      Can- can I be blunt? And you might be really bored of answering this, and it's probably a shit question, but, you know, we look at, like, a Blue Apron of the world, a very famous brand name that obviously did not end the way that investors wanted it to, you, on the other hand, are very, very different. (laughs) What- where did they go wrong where you went right? What's the difference?

   3. DRDominik Richter11:32

      I'm not sure that, uh, it's, uh, it's good style or that I, I wanna, kind of, like, comment too much on, uh, on competitors because I also don't have, like, a lot of inside knowledge of, uh, of what's going on or not. But if I look internally at HelloFresh-

   4. HSHarry Stebbings11:48

      Mm-hmm.

   5. DRDominik Richter11:48

      ... and what we're trying to do and some of the philosophies that we carry, then maybe those are, like, a little bit different to some of the philosophies that some of our competitors, or some of our US competitors specifically, have carried. And I think we've always had a- had a big appreciation for understanding things in the most detail there is, uh, diving deep and building things internally rather than leveraging, for example, external agencies or leveraging external suppliers. So we always felt there is a number of competencies, a number of muscles, that we want to really understand in detail, and we'd rather build them in-house and we try to really figure things out, and then that will really pay off in the long run.

   6. HSHarry Stebbings12:34

      I had Mike at ButcherBox on the show, um, and he was interesting, he said the biggest problem that alternative providers had is they tried to vertically own everything. They tried to own all the facilities, they tried to do all the shipments, they tried to do everything, and he was like-... don't do that. We're, we're happy to pay a little bit higher price. We can outsource that. That's not our job. Do you think that's wrong? Do you need to vertically own everything?

   7. DRDominik Richter12:58

      I don't think you need to vertically own everything. I think there are some parts of the value chain that you want to own.

   8. HSHarry Stebbings13:06

      Hmm.

   9. DRDominik Richter13:06

      But it also depends on the stage of the business. So even today, we're incubating, like, a number of new business lines, and very clearly, in the first two, three years, we're trying to keep fixed costs, like, as low as possible. It's all about finding product market fit. In these times, I think it makes total sense to say everything that doesn't have to do with product market fit, you wanna outsource. I don't wanna spend mental bandwidth on that. I wanna make sure I have a great product, I understand some of the distribution channels, I understand my consumers. I can act fast on their feedback. I don't wanna do all the stuff that can keep me up, like, you know, um, the whole night and the whole day and worry about that stuff. But at some point, I think it's really important that if you actually say, like, "Hey, this is mission critical for my success, I don't want to have any dependency on somebody else, plus I also want to understand how good you are in something," right, then you actually need to go in and do that yourself. And I think there have been different phases in our, in our, um, journey. But I would definitely say, also looking at some of the competition that we've had, that at certain points in time we felt that really going from five wholesale suppliers to integrating with 1,500 suppliers all over the US directly to capture that margin upside, to get much better freshness and quality, that this is something that drives a lot of value. It meant that we had to hire, like, 100 people internally and build technology for that, et cetera. But it really helped us to capture a lot more margin on every order that we did. We also never said we wanna outsource anything that has to do with performance marketing, for example, because as a direct-to-consumer company, right, that's one of the biggest sensitivity on your LTV to CACs is your CAC. So I really wanna understand that end-to-end. I wanna dive deep. I wanna have world-class people internally who I can challenge, who can build up, like, a great growth engine, and I don't think that even if that takes some time and investment in technology, in people, and process, those are things that I just do not want to have any dependency on anybody else.

   10. HSHarry Stebbings15:17

       Can I ask you a weird one? But I can, like, um, customer acquisition cost-wise, I'm always stuck in the way that I'm like, does it go down over time because you have brand marketing, you have word of mouth, you're a bigger name? Or does it go up because you've saturated the core market that's most tangibly obvious for your products, and so now as you're going into less obvious markets, does it go up or down do you think?

   11. DRDominik Richter15:43

       So I think you described the two, the two dynamics well, right? On the one hand side, you tend to penetrate much more deeply into a specific total addressable market, and that generally means that your, that your customer acquisition goes, uh, cost goes up. On the other hand, like, you're building a brand, you probably have a big database of people who have ordered with you at some point, and so those two dynamics kind of offset each other. So I think, you know, as you scale and with more tenure on a market or in a geographies, you have really those two effects that are in some ways offsetting each other. And then you need to look really at the category, sort of, like, what is, what is weighing out the other one? But you're describing well the two dynamics that

8. 16:29 – 26:21

   CEO Capital Allocation and Decision Making

   1. DRDominik Richter16:29

      you're seeing.

   2. HSHarry Stebbings16:29

      Yeah, can I ask, you know, in terms of capital allocation, we sp- spoke about kind of the vertical integration there, but do you think the best CEOs are the best capital allocators? I had Tobi from Shopify on the show, and he said that the best CEOs are the best capital allocators. Do you agree?

   3. DRDominik Richter16:44

      I think that's a very financial view. So capital, that's probably what a PE fund, uh, would tell you, it's th- they are the best capital allocators. So I think capital allocation is a very, is a very important part of your job. But it's more than capital allocation, right? It's resource allocation. Like, where do you actually put sort of, like, your people? How do you organize your people? How do you make sure you bring out the best in your people, et cetera. I think these are jobs that are at least equally important as capital allocation. Probably capital allocation becomes more and more important the more mature your business is. The less it is about building and the more it is about allocating the capital that you have at the highest ROI projects.

   4. HSHarry Stebbings17:25

      Do you think that's where you are now though?

   5. DRDominik Richter17:27

      It's part of my job, but-

   6. HSHarry Stebbings17:30

      Mm-hmm.

   7. DRDominik Richter17:30

      ... I'm definitely, um, excited about building, and what I like doing is problem-solving at scale. That's really sort of, like, what gets me out of bed in the morning. And so I'm trying to definitely spend time on capital allocation, a lot of time on capital allocation, but equally important is trying to be close to the products, close to the business lines, to the operations that are driving a lot of the value that you're actually trying to generate and that you're trying to create in your business.

   8. HSHarry Stebbings17:58

      Before we discuss people, because I think it's such an important point, but in terms of, like, capital allocation, what was the best capital allocation decision you made, and what do you think was the worst?

   9. DRDominik Richter18:07

      I think I have a pretty good track record in, uh, in M&A. Over the last four years, we've generated about 1.5 billion in cash flow from operations. Of those 1.5 billion that we generated, we allocated roughly 900 million into making our own operations better. So in our fulfillment network, in our last-mile logistics, in our technology, actually in our automation of some of the fulfillment centers. We spent about-... 300 million on M&A, and we did a share buyback of about 200 million over that period. So that's kind of like, hey, you generate 1.5 billion, how do you allocate that? That, in the end, is capital allocation, right? As you can see, we have a strong preference first to investing back into the business, because we do think that our business can become a lot larger than what it is today. But the best capital allocation decision, nonetheless, was probably one of the M&A deals that we did. Um, we bought a company called Factor. That's a ready meal company in the US which, um, has been growing very nicely since we actually applied a lot of the muscles that we developed to that business, and that has certainly been a, a very good return for us and hence a very good capital allocation decision.

   10. HSHarry Stebbings19:25

       Can you take me to that decision then? We're, w- we're sitting at HelloFresh, and obviously we have he- co-headquartered, Berlin and New York, but, you know, we're in Berlin and we... H- how did you come across it? Why were you excited by it? Take me to the decision. I'm really fascinated by this one.

   11. DRDominik Richter19:40

       We have been excited by other direct-to-consumer verticals. I think the way that I look at it is we operate a portfolio of different P&Ls, of different business lines. We started the business in 2012. We IPO'd the business in 2017, and at that point, we were active in six markets globally with one brand, HelloFresh. Post-IPO, we said there's a lot more markets that we can go into with our meal kit brands, and we basically in the three, four years after that, so between 2017 and 2020, launched HelloFresh in another eight or nine markets as the one brand. We also said there's a good opportunity to actually go into, um, a premium category and into a sort of, like, everyday value category, and launched different meal kit brands with Green Chef in the US, and EveryPlate in the US, and also brought those to some of our European markets. At some point in 2020, we said, "Okay, meal kits, we have a lot of business units, a lot of markets that are in the early days of their growth S-curve, and we have others that are maybe a little bit more mature and where it's more about managing them for cashflow, and where it's more about really building out the customer proposition." But we've basically became interested in what are other direct-to-consumer vertical that share a lot of the things that we like about meal kits, and maybe a lot of the complex problems that we already solved for meal kits. And we first, um, had a big discussion about, "Is that something we should incubate ourselves? Is that something that we should actually do ourselves?" And I think back in 2019, we actually tried our hand at coming up with our own ready meal provider, but we sucked at cooking the meals, right?

   12. HSHarry Stebbings21:25

       (laughs)

   13. DRDominik Richter21:25

       We were very good at generating demand. Six months after launch, we were at 10, $15 million run rate with a small brand that we, that we launched, but the meals were terrible. Like, we got really bad recipe ratings. Customers didn't stick around. It was basically a leaky bucket because the meals were not great. We tried that for probably about a year or a year and a half, but we couldn't really get the meal quality right. That's when we started looking into sort of, like, some of the other companies in that space, and really were focused on which companies make the best meals, which companies have really cracked that food manufacturing process, that cooking process at scale, and how can we potentially partner up with them?

   14. HSHarry Stebbings22:09

       Is quality not just aligned to margin? And I know that sounds blunt, but it's like, I can make the best meal, but it'll just be the lowest margin because I have the best produce. I have the best steaks. I have... Do you see what I mean?

   15. DRDominik Richter22:21

       I would say it's one component of it, how much, how much money you invest, but how do you cook that? How do you prep it? How long do you keep it in inventory? How quickly does it move from one station to the next station? That has all to do with the freshness, um, of the product, and the quality of the product can degrade, like, very, very fast if you're not moving it from one station to the next station. You know, those are big cooking facilities. At the moment with Factor, we have two of the three biggest cooking facilities in North America. Guess what the other one is, the one that we're not owning of the top three cooking facilities in the US? Disney World, Orlando.

   16. HSHarry Stebbings22:58

       (laughs) And, and so, uh, you get in touch with the Factor team and say, "Hey, we want to buy. We love your food"?

   17. DRDominik Richter23:07

       I think first we do a lot of desk work. We do a lot of desk research. We're trying to, like, really understand all of the competitors. We're trying to look at things like credit card data. We're trying to look at, uh, web traffic. We're trying to do a lot of blind tasting of meals and mystery shopping to understand the products, and do a lot of, do a lot of legwork and pre-validation work before. And then, at some point, make a decision, "Hey, we should, we should build a relationship. We should get to know each other." That's what happened. That's usually then, you know, your dating phase. You're trying to evaluate if that might be a fit, if there is some willingness.

   18. HSHarry Stebbings23:43

       And then we decide to buy them. How's integration? Integration's fucking hard. How is that?

   19. DRDominik Richter23:48

       Integration is very hard.

   20. HSHarry Stebbings23:50

       Yeah.

   21. DRDominik Richter23:50

       I mean, I have to give a lot of kudos to the, to the Factor team. I think, um, they have been so incredibly collaborative. They've also been so willing to, like, really partner up with us, focus a lot on some of the parts where they were excellent, where they were world-class, but being very open to, you know, some of the former HelloFresh team taking over other functions, um, and also then integrating sort of, like, um, Factor into our overall network. So it's probably been an integration phase of about 12 to 18 months where we work through, like, a good plan. It was all about being aligned on DNA, being aligned on our operating system. That is something that we talk a lot about internally, what is our operating system that makes large groups of people run in the same direction, talk the same language. That is something that we spend a lot of time on. And then just, you know, making sure that, you know, we can basically together build an athlete that carries over the best muscles that we have built at HelloFresh with the best muscles that we have built at Factor.

   22. HSHarry Stebbings24:54

       What was the worst capital allocation decision you made, on the flip side?

   23. DRDominik Richter24:58

       In the rear-view mirror-... one of our share buybacks was at much higher levels than where the share price is trading today. So, if I'm looking at the IRR of that investment, that was probably not a great investment. But then in the end, right, we're not doing that to, uh, to push the stock price, we're doing that to, uh, grow free cash flow per share by reducing the share count. So I think in the long run, and in the end all you can do is work on the long run, you reducing the share count, and then hopefully at some point in the future, that will also have been a good capital allocation decision. Now about, uh, two years or 18 months after we've done it, the IRR on that does not look great.

   24. HSHarry Stebbings25:38

       Yes. Uh, being in venture, I, I understand the IRR's not looking great right now. So it's okay, I, I feel your pain. Can I ask you, when you... w- what did you IPO at? What was the price when you IPO'd?

   25. DRDominik Richter25:49

       We IPO'd at about, uh, 10 euros.

   26. HSHarry Stebbings25:51

       Do you like being public? Obviously I have many public market CEOs on the show, none of them like it. They're honest about it. They're like, "No, I wish I wasn't." (laughs)

   27. DRDominik Richter25:59

       (laughs) There are some things which are definitely beneficial, and there are others which are not incredibly beneficial. When you raise venture capital, in the end you need to make a decision: Are you gonna go for a trade sale or are you gonna IPO the business? Those are, in the end, the only two credible path. And if you still want to run the business, if you still feel that

9. 26:21 – 30:26

   Navigating Public Company Challenges

   1. DRDominik Richter26:21

      there is a lot of runway ahead of you, then you probably don't wanna sell the business and give up-

   2. HSHarry Stebbings26:27

      Yeah.

   3. DRDominik Richter26:27

      ... complete control, so you're gonna IPO the business and, you know, uh, it's not always the easiest to have a daily reflection of, uh, everything, um, that's going on, on a, on a screen and, like, a, a value put on you every day instead of, like, every two years or so. But it also, um, you know, is sometimes good, um, is disciplines teams, kind of like makes you think straight. I think you have a lot less of this insanity in public market companies than you might have seen in private market companies in the last three years. So, you know, I think it has pros and cons. But if you wanna keep being in charge for a long time and you have raised venture, in the end you need to go public. That's pretty clear.

   4. HSHarry Stebbings27:10

      How do you deal with team morale and the, like, daily ticker on how much stock is worth? The joy of bluntly, you know, being private obviously, is that y- you raise at a certain price and then people kind of have that in their mind as the anchor and they do the work. When it's daily it's like, "Check. Am I richer? Am I poorer? Am I richer? Am I poorer?" How do you prevent team morale sinking with macro taking effect on market caps?

   5. DRDominik Richter27:38

      I do feel that people checking a stock price, that happens, like, once you go public, especially in the beginning because everybody's excited and everybody thinks, like, "Hey, what's happening today? Why is it up 3%? Why is it down 3%?" Guess what? It's just randomness or macro factors, et cetera. Your business is still the same. I think Warren Buffett had that great quote where he basically said, "If I buy a hamburger, um, at $2 and the next day they sell the same hamburger to me at $1, like, I'm happy. You know, I can buy double the amount." And that's a little bit like... It's still the same company, you know? There might be, like, a different price on the stock ticker, but it's still the same company. And that's also, if I look at the last 12 months, I think in almost every domain of the business, we're a better company today than what we were 12 months ago. We've built a lot of technology, we've hired great people. I think we've built out our HelloFresh operating system a lot more advanced than where it was 12 months ago. We have a bigger distribution network. We are, uh, smarter how we make marketing or growth capital allocations. So that's kind of, like, what really counts. And then in the long run, I think, um, um, there will, there will be times when, when things look differently.

   6. HSHarry Stebbings28:52

      I'm, I'm really intrigued on, on two aspects before we move to people. One is, like, the unbundling of the space. I feel like people are getting more and more specific with preferences. You have, like, the gym bunnies who want protein meal kits and you see, like, gym meal kit companies that just do, like, protein gym bunnies, and then you see, you know, specific religious groups that have, like, religious meal kit companies. And it just seems like it's getting so unbundled as a space and segmented by, like, societal group. Does that concern you, that unbundling of the space in this way?

   7. DRDominik Richter29:26

      I don't think it concerns me because I do feel we're in the pole position to deliver a great value proposition to a lot of different audiences out there. When you look at different consumer categories, it's very rare that you have a consumer category where one company has 100% market share and there's just one company for a certain consumer product. What you tend to have in consumer categories, you have one or two really big brands, usually global brands, that own a large share of that category, but then you always have, like, smaller niche players, local players, because tastes are very different. And that's not only about food, right? That's in beauty, that's in self-care, that's in soft drinks, that's in vitamins, that's basically... Everywhere in the direct to consumer or in different consumer categories you tend to have the gorillas in a certain category and you tend to have a much more fragmented long tail because you also have long tail tastes and some niches.

10. 30:26 – 36:09

    Business Impact During Economic Recession

    1. DRDominik Richter30:26

    2. HSHarry Stebbings30:26

       If we think about macro, I, I was thinking about this before and it's like, obviously we're in a tough time and, like, we think about recessions coming and a recessionary period ahead. I was thinking we're actually on a run to be honest, Dominik. Does that help you or does that hurt you? People obviously can get food cheaper if they go to kinda more discount, you know, supermarkets, bluntly, but then also they may not be going out into restaurants and they may get it instead. How do you think, like, a recession impacts the meal kit business as a whole?

    3. DRDominik Richter30:56

       So one of the first buckets where people start saving is they're going less to restaurants. That's definitely what you have seen in previous recessions, is that the share of out-of-home food has...... actually declined, whereas the share of food that you consume inside your own home actually goes up. I think that's something that is marginally positive for us. On the other hand, there are definitely, you know, some customers who are much more concerned about their disposable incomes, and they might think longer and harder about taking up a new routine. And that's also something that you can see with us. I think our existing customer base actually shows very good retention. They're, on average, ordering more meals with us than they did, than they did before. Part of that because we made a lot of investments into the assortments, into the menu. But it is, in tough macro times, a little harder to get customers to that first purchase, to basically-

    4. HSHarry Stebbings31:56

       Huh.

    5. DRDominik Richter31:56

       ... say, "I'm gonna start something which maybe is the same price, maybe slightly higher." It's always very hard to make, like, a like-for-like comparison with going to the shop yourself, depending on how much you value your time, whether you're buying the same quality, the same cuts. We have now shown over the last two years that we can also navigate through economic cycles without having, like, a hugely negative impact on our business.

    6. HSHarry Stebbings32:20

       No, I do agree. Do you think it's the hardest time ever to be a direct-to-consumer founder? I was chatting to another one the other day, and they said, you know, between Facebook performance challenges, you know, Google challenges, recession, "Fuck, it's hard," he said. "This is the hardest time it's ever been for direct-to-consumer founders."

    7. DRDominik Richter32:38

       I'd say it's a very different time than what it was, maybe five or seven or eight years ago when the whole direct-to-consumer boom started. We started the company when direct-to-consumer was not really a term. I think we're today one of the largest direct-to-consumer companies, um, outside of China. I don't really know any direct-to-consumer company that is much larger than we are, but it's certainly, like, um, like, very different today than it was back then. And I think back then, you had a lot of people that started the direct-to-consumer company by, you know, going to a retail store, looking at shelf space, looking at what are the most outdated brands there that could use a new font and a new branding, and you started your direct-to-consumer, um, company. And it was very easy to get the first customers in. And especially if you were operating in the US, with such a large domestic market, it was very easy with one or two growth channels to actually get to 50 or 100 million of revenue without being, like, extremely sophisticated.

    8. HSHarry Stebbings33:40

       Yeah.

    9. DRDominik Richter33:40

       I think very clearly, those times are over, but I don't think that the time for direct-to-consumer is over, because in the end, right, direct-to-consumer means you make it more convenient for the consumer. The consumer probably has a lot more information, has a lot more advice, has a lot more, um, crowd feedback on your products. So, I think from a consumer perspective, direct-to-consumer is anything but dead. But what you need to do today, you need to have a very differentiated proposition. You need to either be deeply integrated on the supply chain, or you need to have a unique angle with distribution, or you need to be, like, very, very good, uh, to outperform some of your competitors or others to make the marketing equation work. But still, every single year, you have great direct-to-consumer companies being started. And every single year, you have great exits of direct-to-consumer companies which have scaled to levels that very few imagined they would actually get to.

    10. HSHarry Stebbings34:40

        I was debating whether to go here, but fuck it, I'm enjoying this, and so I will-

    11. DRDominik Richter34:44

        (laughs) .

    12. HSHarry Stebbings34:44

        ... uh, and we'll see how it goes. Uh, my question is, like, is direct-to-consumer a venture-backable segment? And just p- wait, pause with me on that one. HelloFresh is like fucking amazing, market leader, bu- but it's like the, one of the all-time leaders, and it's, you know, it's, it's three-and-a-half billion. But like, it's not like SaaS, where there's, you know, 50 and, you know, there's 25 over 10 billion. It's like, as a category, is it venture backable? How would you respond if I asked that question to you?

    13. DRDominik Richter35:19

        I don't think you can make a plain or broad statement that applies to all companies, but I do think there were-

    14. HSHarry Stebbings35:25

        (laughs)

    15. DRDominik Richter35:26

        ... there were-

    16. HSHarry Stebbings35:26

        I just try. (laughs)

    17. DRDominik Richter35:27

        ... a lot of companies that ended up being venture backed, when the better path would have been to raise an angel, angel round, trying to get to profitability, and actually scale the business to 100, 200 million in revenue. For sure, I've made a bunch of angel investments, and I've had that discussion with founders a lot, where they say like, "You scaled a company to that level. You raised some venture money. I wanna do the same." And I very often advised them and said like, "Look at the personal outcome for you," or then obviously, by extension, myself as an angel. The much, um, less risky, um, way is to, is for many, many of those categories and many, many of those companies to not raise venture.

11. 36:09 – 37:42

    Necessity and Impact of Venture Capital

    1. DRDominik Richter36:09

    2. HSHarry Stebbings36:09

       You couldn't have done what you did without venture though, could you? Do you regret raising as much venture money as you did?

    3. DRDominik Richter36:15

       No, for us it was fine. So number one, I think we have a number of particular features, characteristics of our business model that, why it makes sense to raise venture. You're cooking or eating basically on a daily basis, right? It's something that has like a very high frequency, which means, um, what a lot of direct-to-consumer companies suffer from, that they don't get the frequency. Secondly, food is like such a big category that you can build like a really, really big company. So, in the end, um, I think for what we actually did and achieved, we didn't raise like crazy amounts of venture.

    4. HSHarry Stebbings36:55

       How much did you raise in the end? Kinda broad range.

    5. DRDominik Richter36:58

       Up to IPO, we raised around about 300 million, and that was just sort of like, we had a cumulative cash burn of about 300 million before we actually started generating cash flow. And since we have started generating cash flow, I think about-... three years post-IPO, we had our cash flow breakeven, and since then, um, we have, you know, returned cash to shareholders, invested in all the businesses, did M&A, et cetera. So I feel for the type of ambition level that we had, and for the revenue growth and category that we were going after, it was not insane amounts that we raised.

    6. HSHarry Stebbings37:33

       When you review your fundraise- No, it's not a tool. I mean, you- we see AIC grounds for is that much dominant, so I mean-

    7. DRDominik Richter37:39

       (laughs)

    8. HSHarry Stebbings37:39

       ... you're positively lean. Um, ah,

12. 37:42 – 39:06

    Fundraising Challenges and Learning Experiences

    1. HSHarry Stebbings37:42

       w- when you review your fundraising though, is there anything that you know now that you would tell yourself, having all the knowledge you do now?

    2. DRDominik Richter37:49

       A lot of that is, is probably with hindsight bias, right? But-

    3. HSHarry Stebbings37:53

       Oh, what, what would it be then?

    4. DRDominik Richter37:54

       ... we definitely developed our scar tissue around fundraising, and I think (laughs) almost every successful founder will have some of the same story. So we definitely started fundraising processes too late, and it was very, very close to actually closing a round and, uh, and getting it done.

    5. HSHarry Stebbings38:12

       Can you tell me a story of when it was thinnest, like closest? (laughs)

    6. DRDominik Richter38:16

       So I think in the early days, there were one or two occasions where we were literally, like, three to five days before kind of like thinking about, uh, filing for Chapter 11-

    7. HSHarry Stebbings38:26

       Ah.

    8. DRDominik Richter38:26

       ... which I guess is the, is the, is the-

    9. HSHarry Stebbings38:27

       Wow.

    10. DRDominik Richter38:27

        ... right term, at least in, in, in US terms.

    11. HSHarry Stebbings38:30

        Wow.

    12. DRDominik Richter38:30

        But, uh, very, very close because in the end, I mean, you're probably sitting on the other side of the table, but, uh, in the end, there's always, like, you know, things popping up, gets delayed by two weeks, gets delayed by another month. There is this one document missing, et cetera, et cetera. And all of a sudden, you're like, "Hey, my duty is actually when I feel like I cannot be able to, to do payroll, it's actually my duty to, to flag that." And, um, they were definitely in the first one or two years, probably the first two years, um, I think two occasions that I remember very vividly where it was very, very close to, to getting to that point.

    13. HSHarry Stebbings39:05

        Dominic, how

13. 39:06 – 42:17

    Coping with Stress and Finding Motivation

    1. HSHarry Stebbings39:06

       do you deal with those intensely stressful moments? Like that is like all night, you are not sleeping, and you're having heart palpitations. Today and back then, how do you deal with the real stress moments?

    2. DRDominik Richter39:18

       So the stress moments have probably become fewer over the last couple-

    3. HSHarry Stebbings39:24

       (laughs)

    4. DRDominik Richter39:24

       ... of years. I think it definitely helps when you run a profitable company, then in the end, um, you definitely sleep much better. You still have, like, as many problems and as many things that, that worry you, but you don't have this existential angst (laughs) that you, that you carry around with you. So I think I definitely sleep better since the point that we were sustainably profitable and started generating, like, real profits. How do I deal with it? Generally, with stress, I think my, my, my way to deal with stress is just having, like, a very good routine of, uh, of doing sports. I'm a sports fanatic, and it helps me clear my mind. It helps me get peace of mind, and every time I pick up one of many injuries that I pick up while doing sports, and I can't do something for two weeks or three weeks, I'm getting really anxious, and I can feel that I get, like, way more stressed and that I'm not as much, that I don't feel as healthy, that I don't feel as fit, s- that I don't feel, uh, that I do feel a lot more stressed.

    5. HSHarry Stebbings40:23

       Can I ask you, I think the, a lot of people say it doesn't get easier over time. I think that's bullshit. I think it does get easier. I, I very much enjoy drinking Fiji water and sitting in a nice studio versus the kind of shitter days. (laughs) Um, do you think it gets easier over time?

    6. DRDominik Richter40:41

       So to give you a philosophical answer, in the end, it's always a race against yourself and against your mind and how you feel about things. You have all those cases where people, you know, from one day to the next, make a lot of money, for example, and that high sort of, like, goes away after two or three months already. And I think that is something that, in the end, you need to be at peace with yourself. It's, in the end, always just a race against yourself. Yes, you can probably afford, like, a nicer chair and a better laptop and a nicer mattress that gets you where you s- where you sleep on better, but in the end, it's all about being in control of your, of your head and control of your mind and being at peace with yourself. I think that's the most important thing.

    7. HSHarry Stebbings41:24

       What motivates you today then?

    8. DRDominik Richter41:26

       I would describe it with problem solving at scale. So I don't wanna take the easy route. I really wanna kind of, like, go deep. I wanna figure things out. I have a fascination with the, with figuring out things and figuring out problems, and I really get excited, and I get a rush if I can see that we had a big hypothesis. We're building something for a couple of weeks. We're releasing it to customers. We're seeing customers respond to it. It trends positively. It's that sense of competition, it's that sense of winning, and it's that sense of probably, like, proving yourself over and over again that you can do it, but that is something that I really enjoy. And in my position at the moment, I'd say that I have the privilege of doing problem solving at scale and with other very smart people around me. That what motivates me, and that what's- that's where I derive a lot of joy from.

14. 42:17 – 43:59

    Success Strategies in the US Market

    1. DRDominik Richter42:17

    2. HSHarry Stebbings42:17

       I do wanna ask about the expansion. Do- where you said about angel investments you've made, we obviously both sit in Europe. Many European companies try and win the US and fail. You've done it immensely well. Can you help me understand, what does it take to win the US, and what are some of your biggest lessons from doing so well in the US as a originally European company?

    3. DRDominik Richter42:41

       The differences really all go back to just the, the massive size of the domestic market in the US, right? The massive TAM that you can go after. If you're operating in such a big domestic TAM, you're making, right from the start, you tend to make different decisions. You're trying to scale much faster. You're trying to hire more expensive people because in the end, you're gonna have a lot more operating leverage. You're gonna have higher salaries. You're probably not caring as much about the details as about telling your vision. What I always felt is that bringing some of the more European skillsets...... diving deep, more of an engineering mindset, um, having attention to detail to such a large domestic market like the US is, like, a really great success formula. Now obviously, I'm, like, vastly generalizing here and there's, like, a lot of Americans that are- have as much or more attention to detail than any European out here. But I generally feel that the size of the domestic market caters more towards certain types of founders than what you tend to find in Europe. If you have grown up as a company in Europe and you go to the US, you definitely need to throw overboard a lot of the things that you feel that you have learned.

    4. HSHarry Stebbings43:58

       What do you need to throw

15. 43:59 – 46:03

    Competitive Landscape in the US

    1. HSHarry Stebbings43:59

       overboard?

    2. DRDominik Richter43:59

       I think, number one, everything that you know about competition will be 10X, um, what you, what you'll find in the US. Because the size of the price is just so much bigger that you will naturally have more competitors going after the same space. They will be able to raise vastly more venture capital than any of your competitors could do in, in Europe. They will probably kind of, like, move equally fast as you do, or even faster. So I think that's just one of the- those notions where we also struggled in the beginning, basically saying like, "Okay, like, what does that actually mean now? Do we need to pay people very differently now?" That was definitely, like, a big discussion, right? Um, and that, I think, is a big discussion for every, for every company from Europe that goes to the US.

    3. HSHarry Stebbings44:41

       And you do, don't you? That's the conclusion you come to?

    4. DRDominik Richter44:44

       In the end, you're trying to establish systems. Now we're obviously a- a way more scaled and mature companies. Now we have system and processes for these things, which translates these things into fair and equitable, um, amounts. But in the end, um, in the beginning, it's a lot more cowboy math, um, that you need to do, and where you need to get comfortable with certain levels so that you can actually build a competitor that's worth competing with.

    5. HSHarry Stebbings45:09

       Any others that we need to throw overboard? Or any other traditional European stigmas, approaches, mindsets you're like, "Uh-uh, that's not gonna work either." Approach to salaries, approach to competition. Anything else?

    6. DRDominik Richter45:22

       I'd say, um, so the approach to fundraising as well, right? Um, I believe for my seed round and for my Series A round, I've been asked about providing business plans for the next five years, which were obviously all made up, et cetera. Back then, very different times, right? Very different times, very different ecosystem, but with different funds that you talked, et cetera. That is also, like, very different in the US. I think it has changed. You know, I haven't raised venture capital since 2016, so it probably has changed a lot over those, over those periods. We have been public since 2017, but back in the day, 2012, 2013, 2014, 2015, where every year we were going out and doing fundraising, I, I think it was, it was very different what, what, uh, what people were asking for.

16. 46:03 – 55:00

    IPO Timing Decisions

    1. DRDominik Richter46:03

    2. HSHarry Stebbings46:03

       Why did you decide to go public so early? When you think about that, 2012, I think you said the founding of the company, and 2017, the IPO. You know, five or six years to IPO is really fast. You know, we could... Traditionally, it's the 10-year journey to IPO. Why did you decide to go out that early?

    3. DRDominik Richter46:19

       We had the notion that we wanna run this company for a long time. And when you raise a lot of venture capital, in the end, you need to make a decision. Are you gonna sell that company or are you gonna take it public? My view is, the price at which you go public is completely irrelevant. Almost nobody sells at the price of the IPO. Everybody's locked up. And in the end, it just matters at the point sort of, like, when lockups are over, when somebody wants to sell, et cetera. So the price at which you go, at which you go public doesn't matter. It's all about grabbing the window. And we felt back in 2017 there was a window for business models like ours. We tried to make sure that we can get out, um, through that window, and then felt like if we establish a public market track record, then sort of, like, valuation will take care of itself. Versus saying like, "Hey, let's optimize the last 10 percentage points and go public at that share price," and then, you know, the market is not there or you're actually going public, and six months later when lockups are up, kind of like you're down 50%. The price at which you go public is completely irrelevant for everybody.

    4. HSHarry Stebbings47:32

       I, I sometimes think that, like, public markets, in their mind, have the idea that a company is finished, or negative. I had the founder of Allbirds on the show recently, and I tweeted that, you know, they went public at 3.8 billion, and it's now 120 million. And I, I still, by the way, really like my Allbirds, but like, the sentiment is just like, the public markets wants it crushed. And so I just worry that sometimes perception can lead to reality, and so although the price doesn't matter, it does. Because if you have a shit first day that leads to a shit first week, and everyone goes, "No, I knew that that was a bad category," and then that leads to a shit first month, and then team members go, "Fucking hell, we're down so much, I wanna go to Airtable now." (laughs) Like, it can be a real knock-on effect. So I'm just pressing you. Does it not matter?

    5. DRDominik Richter48:31

       I think it's irrelevant. First day price, completely irrelevant. The price after 12 months, after two years, yes, that starts being relevant. The price after three years, that's what you should be optimizing for. Think about it like that, right? I think also for us, if we had missed the window in 2017, potentially there would have been another window in 2020. Now, who knows whether that window actually opens or not? Whether you have a big crisis like the pandemic coming and the window is actually closed or not. All of the macro challenges that you have, all of the macro factors that you have that you can't control. I think there is so much uncertainty, and history is littered with companies that wanted to go public and optimize and squeeze out the last 10% for the first day, and they missed the window, and then had to do emergency fundraising if they weren't profitable, or put a lot of structure and ratchets in. We never had any structure, we never had any ratchets. We always were, like, very conservative on that end, and we wanted to go kind of, like, very quickly towards having common shares, no pref stacks in there, and, um, we felt like if there is a window...... we wanna go out. And then, on public markets, we can prove ourselves and everybody can decide. Let's make a decision whether that was successful or not three years in, and in the end, I think it was the right decision. I think the way that our category traded would have not allowed us to IPO the business at any other point in time.

    6. HSHarry Stebbings50:03

       I agree with you, and I actually wish more would, (laughs) as an venture investor, I wish w- more would IPO sooner. Um, can I ask you, on- on you as a CEO, I actually spoke to, as I said, Jeff, Harley, Nico, many more actually, around the table. Um, they, they did s- actually kind of coalesce around a weakness as the CEO. I'm intrigued if you say the same weakness. It's like an all-star miss or misses. What do you think your biggest weakness as a CEO is?

    7. DRDominik Richter50:31

       I don't particular enjoy being sort of like the center of attention.

    8. HSHarry Stebbings50:36

       (laughs)

    9. DRDominik Richter50:36

       I think I'm actually, I c- I can be fairly good at it, but I just don't enjoy it that much. I always have to push myself. I don't like to kind of, like, be-

    10. HSHarry Stebbings50:45

        Interviewed. (laughs)

    11. DRDominik Richter50:45

        ... interviewed, sort of like, in the news cycle all the time and, uh, and- and doing these things. I think they are important up to a certain point, but it's definitely something that compared to, let's say, a non-founder CEO, I'm definitely scoring very light on that one.

    12. HSHarry Stebbings51:00

        So they- they coalesced around, like, storytelling and being public was the coalescing point, some kind of alignment there. The- the one thing that it does help with is talent acquisition, and I do wanna touch on this before we do a quick-fire 'cause, uh, Harley, in particular, told me I had to ask this. He said, "You're particularly brilliant at hiring non-obvious talent, talent that many people might overlook, and you choose people that people wouldn't hire but are actually brilliant." My question to you is, what do you look for that gives you the confidence to hire these non-obvious people?

    13. DRDominik Richter51:33

        I think he was referring to a particular time at the company. Taking one step back, I think hiring is incredibly important because with every hire that you actually bring on board, right, you have an opportunity to make the team better, clearly better.

    14. HSHarry Stebbings51:48

        Mm-hmm.

    15. DRDominik Richter51:48

        And that should always be the goal, that you want bar raisers, that you're actually making sure kind of, like, the team post that new hire is a better team than it was before. To me, there are, there's, like, different stages, and definitely in the beginning, um, I think we prioritized a lot frugality and probably, in the beginning, mostly recruited friends, family, and acquaintances. That's also always what I tell everybody in my angel portfolio. If you cannot convince some of your friends, family, or acquaintances to join your company, then either your idea is not that good or you're just not a great salesperson. But, um, I think after that period, it's, you have, you have the opportunity for a couple of years to hire for raw smartness only. They don't, you don't need to hire for a lot of experience at that point in time. Business tries to figure itself out. All of the domains kind of, like, um, are still open, and we've had really good experience with hiring people with- with- with very high degree of raw smartness, putting them on certain domains, and those people over the, sort of, like, next five, seven years becoming, like, some of the deepest domain experts in those- in those topics. And I think back then, my board always pushed me during that stage, I think that is what he's referring to, always pushed me at that stage to- to hire more experienced people, to hire people that have led larger organization, larger teams, et cetera, et cetera. But we always felt like we need people who are super scalable in terms of their skillset, in terms of their personality, who have an incredibly high work ethics. I think back in those days, um, was very much expected of everybody to stay in the office til 10:00 PM. I think that's also very different today. But, uh, nonetheless, I think that's, that was a time where we hired for raw smartness only, and I think that was, at that point, I think, very contrarian with some of both our US investors versus our European investors.

    16. HSHarry Stebbings53:43

        Are you back in office?

    17. DRDominik Richter53:44

        Um, for a certain- for a certain amount of time, I think it's, uh, it's very important for collaboration and also for- for mentorship and, uh, and building team cohesion.

    18. HSHarry Stebbings53:55

        I think it's fundamental. Can you tell me, I- I played this game with, uh, our team did, like, this walk the other day in London, and I said, "Can you tell me one role that is not made better by being in person?" (laughs) I can't. And- and they're like, "Devs." No, devs work better together. They're building product. It's a team.

    19. DRDominik Richter54:13

        Yeah, well, look, one of the biggest trends in- in engineering is, uh, is mob pro- programming, which basically means mobbing, which basically means, like, you're getting together, uh, three people around one laptop, giving them each other instant feedback. Like, for sure, there is a huge value in that. Everything that has to do with planning, that has to do with aligning on strategy, figuring out architecture, you know, um, playing thoughts back and forth, these things work way better. I do think if you have a plan, if you need to deliver, um, if it's, like, very clear what are the milestones, where do you need to get to, then potentially, you don't need to necessarily sit next, uh, to your colleague. But for sure, I do think there are, you know, huge benefits to working together very, very closely and having strong bonds in your team.

17. 55:00 – 1:03:41

    Quick-Fire Round

    1. HSHarry Stebbings55:00

       I love that. Um, listen, I wanna do a quick-fire round. So I say a short statement, Dominik, and you give me your immediate thoughts. Does that sound okay?

    2. DRDominik Richter55:07

       All right.

    3. HSHarry Stebbings55:08

       So what do others not know that you know to be true?

    4. DRDominik Richter55:12

       I'm probably not the only one who knows that, but, um, I think everything around tactics is much more important than strategy. If you have the right strategy, you don't need to change your strategy every six months, every year. You have a long-term strategy, three to five years, and you are spending 99% of your time on tactics.

    5. HSHarry Stebbings55:32

       You can be CEO of any other company for a day, what company are you CEO of?

    6. DRDominik Richter55:36

       Going back to my youth fascination with, uh, professional football, I'd probably, would love to be the CEO of a Premier League football club for a day.

    7. HSHarry Stebbings55:43

       (laughs) Which one?

    8. DRDominik Richter55:45

       Oh, I don't mind that much. I think it's not so much my, my personal affiliation with any club as to rather wanting to, to be on the table and understand how those businesses are run, how sophisticated some of the decision-making is, etc., etc.

    9. HSHarry Stebbings56:00

       I would fucking hate it. You think your job is hard? Can you imagine having, like, 50,000 Arsenal fans, like, judging every single thing you do, passionately passionate? I mean, like, ugh, awful. But I-

    10. DRDominik Richter56:14

        Maybe one day is enough then.

    11. HSHarry Stebbings56:16

        Well, you've only got one day there, yeah. Uh, tell me, how do you view competition? Is it like head down, row your own race? Or should founders, like, be very aware of competition?

    12. DRDominik Richter56:26

        So in my view, competition is, is a constant source of innovation and inspiration. I think it's extremely arrogant to not pay super close attention to competition, and I'm not only talking about your direct competitors. I'm also talking about, in our case, all other companies that market to consumers that wanna reach the same consumer. Like, what are they doing? What are they experimenting with? What have they learned? There is thousands of super smart people at all of those companies which are thinking every day about how to reach customers, how to build new technology, etc. To not listen to them, observe them, and not basically get inspired and see that as, as a big shortcut to your own experimentation and learning is extremely arrogant in my view.

    13. HSHarry Stebbings57:13

        Yes, I agree, with a healthy dose. I find sometimes, like, people get too focused on it, and it's like, just row your own race as well. Like, understand what you're doing. Like, don't worry about them. It's okay. Like, focus. I find too many-

    14. DRDominik Richter57:27

        That's why, that's why I said inspiration. It's not, it's not like doing the same, right? It's then definitely making a judgment call and understanding does that apply within the guardrails of what you're actually trying to do or not? And very often the answer is no, but nonetheless, it's always good to understand how that innovation process for others works.

    15. HSHarry Stebbings57:45

        Dominik, what's your favorite consumer brand?

    16. DRDominik Richter57:48

        One of my friends, friends has, has a great consumer brand, actually in London, Luca Faloni. Have you heard of Luca Faloni?

    17. HSHarry Stebbings57:56

        (laughs) Yeah, I've got him coming on the show, uh, in person in the show. A, I love the brand Luca Faloni-

    18. DRDominik Richter58:01

        Okay.

    19. HSHarry Stebbings58:01

        ... and, and B, yeah, like, I was messaging him the other day about the show in 10 days.

    20. DRDominik Richter58:06

        Okay, awesome. I didn't know. Um, he didn't tell me. No, he's a, he's a close friend of mine, and I think he's building, he's building, um, a really strong brand. He's taking a very different route to a lot of us in the venture industry.

    21. HSHarry Stebbings58:18

        Are you jealous of the route he's taken?

    22. DRDominik Richter58:21

        It's a very long road that he's taking, um-

    23. HSHarry Stebbings58:24

        Hmm.

    24. DRDominik Richter58:24

        ... but if he completes it successfully, he definitely has a company where he has a lot of control over, um, and he's building a real heritage.

    25. HSHarry Stebbings58:34

        Tell me, you can have dinner with anyone dead or alive. Who do you have dinner with, and, and what do you ask them?

    26. DRDominik Richter58:39

        I'm probably gonna choose, uh, Jeff Bezos. It's such an outlier, such an anomaly, um, how Amazon has scaled with such high investments in infrastructure, in technology and processes, completely reinvented how people think about organizations. And given that I'm also building in that space, sort of like at the intersection of supply chain, marketing, and technology, I probably have, have, have questions, uh, for, for two weeks straight.

    27. HSHarry Stebbings59:07

        Which competitor impresses you most?

    28. DRDominik Richter59:09

        I wouldn't say like direct competitors. I think, you know, um, indirect competitors, like, um, in the, in the wider food space, I think DoorDash has done an amazing job. I don't think they're directly competitive with us, maybe on the margin, like we're going after the same, the same wallet, the same, the same, um, uh, wallet of spend. In the end, um, I think the way that they have also had a huge focus on operational excellence, how they have scaled in non-obvious ways, where everybody else in that space was focusing on other areas, had a certain hypothesis, and they took the contrarian view, have a business that is, I think, operationally also very challenging, a three-sided marketplace.

    29. HSHarry Stebbings59:53

        Yeah.

    30. DRDominik Richter59:54

        That is something that I have huge respect for, and I think they've built, like, um, a massively successful business and they're very much focused on the long term. And, um, Tony and the team are doing such an amazing job.

Episode duration: 1:03:41