Zepto: How Two 17-Year-Olds Built India's Largest Seller Of Fruits and Vegetables

1. 0:00 – 0:17

   Intro

   1. APAadit Palicha0:00

      If you remove all constraints and you just remove all the laws of physics, and you just think from first principles, what's the most extreme positive customer experience you can give? And you start from there, and then you work backwards from, "How can I make that possible?"

   2. JFJared Friedman0:12

      [upbeat music]

2. 0:17 – 3:12

   How Zepto Got Started

   1. JFJared Friedman0:17

      So Aadit, everyone in this room knows Zepto. Almost everyone uses the product, many of them probably every day. I don't know how many people know the true story of how Zepto got started, so I thought we'd start there. How did you end up starting this incredible company?

   2. APAadit Palicha0:33

      Well, firstly, you know, Jared, thanks for having me, and it's a privilege to be here at YC Startup School. I mean, you know, we started our journey, Kewal and I, watching Startup School videos in my bedroom and at home, and so it's, it's a wonderful privilege to be here. I think, you know, the, the thought process starting this company at the beginning was, you know, we didn't really start with the intention of building a company, as you know, right? We were, you know, two kids.

   3. JFJared Friedman1:00

      How, how old were you?

   4. APAadit Palicha1:01

      We started, I think, working on it when we were seventeen.

   5. JFJared Friedman1:04

      [laughs] [audience applauding]

   6. APAadit Palicha1:04

      Right. So, uh, we-- KB and I, uh, loved building when we were kids. You know, we've been friends for quite some time and, you know, we said, "Wow." Around fifteen, sixteen, we said, you know, "People in Silicon Valley are doing this for a living, building out cool projects for a living, so why don't we explore doing that?" And so, you know, when we were seventeen, we applied to study in California. We were lucky enough to get into a, a good school there, and then COVID happened. And once COVID happened, we found ourselves back in Mumbai, uh, which is where we're originally from. And at that point, you know, we really had nothing to do because we were not in person in Silicon Valley, which is where we wanted to be. And so we said there's no point doing COVID college, online learning. And so we took a year off from college and said, "Let's just work on a project." And that's how it started. And I think really the big problem at the time, first wave of the pandemic, was people couldn't get groceries in their regular neighborhoods, right? Like, the, the small mom-and-pop stores had, you know, issues with labor. The big guys that were delivering next day, you know, were all backlogged. And so we just started a, a WhatsApp group chat where we used to deliver for our neighbors in Mumbai, and that slowly kept evolving until we made it into an app. And the first rendition of the app was called Kirana Cart, and then it kept going from there. And then that's when we were-- we stumbled onto YC, so.

   7. JFJared Friedman2:25

      And I remember the first time I met you, Aadit. This is a story that I don't think has been told very often.

   8. APAadit Palicha2:31

      Okay.

   9. JFJared Friedman2:31

      Um, you were just about to start as an undergraduate at Stanford. You'd gotten into Stanford, amazing school, and you were going to leave India, go to Palo Alto, and start at Stanford. This is just a couple months probably-

   10. APAadit Palicha2:46

       Yeah, yeah, yeah

   11. JFJared Friedman2:46

       ... before you really, um-

   12. APAadit Palicha2:48

       Two, three months before matriculation. Yeah.

   13. JFJared Friedman2:49

       Yeah, like two or three months before y- you started the company that was then originally called Kirana Cart, and I remember you asked me basically, "Should I go to Stanford?"

   14. APAadit Palicha2:58

       [laughs]

   15. JFJared Friedman2:58

       "Or should I drop out and start this company?" [laughs]

   16. APAadit Palicha3:02

       Yeah.

   17. JFJared Friedman3:02

       Maybe for anyone in this room who's maybe thinking through sort of a similar sort of question in their own minds, how did you think about it? How did you end up deciding to start Zepto rather than going to Stanford?

3. 3:12 – 4:46

   Stanford or Startup?

   1. APAadit Palicha3:12

      Yeah, no, that's true, Jared, I think. And by the way, for everyone here, you know, Jared has been pretty instrumental in getting us off the ground. He was our group partner on YC and, you know, he's been-

   2. JFJared Friedman3:21

      Really, the only thing I did was convinced him to not go to Stanford.

   3. APAadit Palicha3:24

      No, no. [laughs]

   4. JFJared Friedman3:24

      Everything else, he's done.

   5. APAadit Palicha3:25

      No, no. He, he did a lot more than that. But, uh, but yeah, I mean, I think in the early days, you know, really a lot of people ask me this question that you dropped out of college. Should I drop out of college and do the same thing? I mean, actually, I have a less heroic answer, which is that we, we thought of it a little bit more tactfully, right? Where we said, "Okay, obviously it's a risk because going to college is a good opportunity," et cetera, et cetera. So I think we took a year, and in that period of the year, you know, we did a lot of ha- I mean, a lot of work to be able to get to some level of PMF. I mean, we, we got to maybe a very early sign of PMF, I think eight, nine months into the journey. And that's when we started saying, "Okay, there's retention, there's compounding in the business." And only up until we got to the point where we started doing about ten thousand orders per day, I remember that point, but that's when we said, "Okay, this is a real business and this is a once in a lifetime opportunity and we should go for it," right? So we-- I think we took our time before we took the big leap, right? Um, and so that's usually what I tell folks is that, you know, you should have some product market fit. You should have a real product that's working and you sh- you shouldn't take the risk before you have the proof of concept of something that's actually working. And to, in our case, we got to, like, a decent, like, sixty, seventy crore revenue run rate or GMV run rate scale before we said, "Wow, we should go for this business opportunity." And also we were lucky enough to get, you know, investor interest at that point when we got to that scale. So we said, "Okay, we've got a term sheet. We've got a business that's working. Customers are liking it. We should go

4. 4:46 – 7:03

   Competing in a Crowded Market

   1. APAadit Palicha4:46

      for it."

   2. JFJared Friedman4:47

      One thing that's interesting to me about the Zepto story that I think might lead to a good lesson for everyone in this room is when you started Kirana Cart originally, grocery delivery was not, like, some new idea in India. There were already, what, two or three billion-dollar companies doing grocery delivery in India at huge scale. What made you think, "So what? I'm just gonna do this anyway"? What made you feel like it was worth launching something that competed with them? I feel like a lot of people in this room would look at a market like that and say, like, "It's too late. I missed it."

   3. APAadit Palicha5:17

      No, I think it's fair. So I think, you know, we started this company in twenty-twenty, or we started working on it in twenty-twenty, and at that point there were, you know, multiple different models that existed in this space of grocery delivery because grocery as an opportunity in India to digitize grocery to build, like, an organized player is a very large opportunity and people have been chasing it not just for three, four years. They've been chasing it for twenty years, you know, even in the offline world, right? And so there were some large mar- players out there. Nobody really had the model that we were doing. There were some players that were doing sort of, you know, doorstep delivery from, you know, other stores. There were some players that were doing next day delivery, two-day delivery. But we didn't really think about it as, "Oh, we'll try a different model." That was not really the thought process. What gave us conviction that we should do it was just bottoms up. Like, when we started that WhatsApp group in Andheri in Mumbai, and most of the deliveries Kewal and I used to do ourselves-And in that process, we would talk to a lot of customers at their doorstep organically. We would give them a bag of groceries and say, "Hey, we have two minutes to chat." And then we would talk to them and say, "Okay, why did you use us? Why don't you use ABC or why don't you just do it yourself?" And that's when we learned a lot that when you actually spoke to the end customer, they were not satisfied. There was no real compelling player or compelling model that really was hitting their needs, including us at that time, by the way. So that first rendition of KiranaKart, we had not nailed the product market fit. And so customers had-- they said, "Okay, we-- you don't have all the selection. Your pricing is too high." The delivery times were not in our control at that point. And so we would just speak to customers and say, "Okay, what do customers really care about?" At the end of the day, they care about speed, quality, selection, and price, right? And so how do we push the bar on all four of those things? And that's when we started for the first time, you know, trying to do these mini warehouses or mini dark stores. And that's when the customer experience significantly improved, and that's when we saw product market fit.

5. 7:03 – 10:30

   The Pivot: Dark Stores & Zepto Is Born

   1. JFJared Friedman7:03

      Yeah, let's, let's talk about this because a lot of people probably don't know that Zepto is really a pivot from what you started with, which even had a different name.

   2. APAadit Palicha7:10

      Yeah, yeah.

   3. JFJared Friedman7:11

      You even like changed the name of the company when you p- when, when you changed the model. So all during YC you were working on this thing called KiranaKart.

   4. APAadit Palicha7:17

      Yeah.

   5. JFJared Friedman7:17

      Maybe, maybe explain to people what the original idea was.

   6. APAadit Palicha7:20

      Yeah. For sure. So look, I think from our lens, like I mentioned, we, we never started with a thought process of building a company. We started from a thought process of just solving a problem for like the thirty aunties in our neighborhood, right? And that's why we started initially with the easiest solution was just a WhatsApp group chat where you used to deliver from existing stores, right? And so we would just go around the neighborhood, deliver to people's doors when they asked us for it, and we would pick it up locally, right? But then eventually we made this meaningful pivot, I think early twenty twenty-one, where we said, "Look, if you're just doing doorstep delivery from like a mom-and-pop shop to the customer, you've got no control on the customer experience, no control on the delivery times. You can't really-- And you can't solve the problems that people were telling us at their doorstep." So that's when, you know, KV and I basically, you know, picked up a, a bunch of stock and we put it into his, his, uh, apartment, and then that was the first mini warehouse in a way.

   7. JFJared Friedman8:15

      Oh, your co-founder's apartment was the first dark store.

   8. APAadit Palicha8:18

      Yeah, yeah. It was. It was.

   9. JFJared Friedman8:19

      [laughs]

   10. APAadit Palicha8:19

       So we started from there and but what we noticed is that, okay, in this like small area where we could, you know, control the customer experience, the response was phenomenal, right? And that's when we took it to the next level where we said, "Okay, let's try to do like a mini cardboard version of a warehouse." And we did that in, in Juhu, if you're familiar with that. And then finally we actually launched a proper warehouse. And then we saw the, the pivot point for us was that controlling the customer experience, you know, we thought, "Okay, you improve the delivery times incrementally, you improve the s- the speed incre-- the quality incrementally, the selection incrementally, the pricing incrementally. There'll be like a little bit of an improvement here or there." But we saw a 10X. Like the one neighborhood where we were doing a dark store versus all the other neighborhoods that we were doing just mom-and-pop shop delivery, the one area where we were doing it from a dark store had three, four times the volume of the rest of the city for us. And so we said, "Wow, there's really like a lot of customer demand here." And so that's when we made the pivot saying that we need to control the customer experience. And so that's when we started going into these mini warehouses. Uh, so that was the thought process. And at that time, the idea of doing these like mini warehouses and delivering to people's doorstep, at least back then, obviously now it's fairly commonplace, but back then didn't really exist. So we didn't come in from a lens saying, "Okay, you know, XYZ player is doing it like this. I'm gonna try doing it like this," or, "This guy's gonna do it like this, and I'll do it like this and we'll see." It was more like, okay, customer is not satisfied, and I would just-- we would just obsess over what can we do physically to get that customer satisfaction up. And then that led us to this mini warehouse model, which by the way, when we started, a lot of people said, "Oh no, this is not the right way to do it. This is not the right way to do it." But the customer was telling us that, "Yes, this makes sense." But all the pundits were not in a way.

   11. JFJared Friedman9:54

       When people were telling you that it was the wrong move to build your own dark stores, what were their reasons?

   12. APAadit Palicha9:59

       A lot of people were building-- I mean, in our business, people were building the business initially backwards from a supply chain or from financial goals, right? Which obviously, you know, makes sense to do, and that's what we do day to day. But really the starting point of any business has to be the customer. So what we said is-- So what people were saying is that, "Okay, this is the model that's viable, and this is what I'm gonna give to the customer. This is the best that I can do, and this is what the customer's going to get." We started from the opposite. We said, "What is the most extreme that the customer wants?" And that's why this concept of ten-minute

6. 10:30 – 12:04

   The 10-Minute Delivery Vision

   1. APAadit Palicha10:30

      delivery, right?

   2. JFJared Friedman10:31

      Which is a crazy idea at the time. I mean, ten minutes still blows my mind.

   3. APAadit Palicha10:34

      Yeah.

   4. JFJared Friedman10:34

      Like somehow I order something in Zepto and like ten minutes later it shows up. [laughs]

   5. APAadit Palicha10:37

      And you know, by the way, the, the thought process, I remember KV and I discussed this. We had that similar discussion that, you know, Brian Chesky, Airbnb, uh, concept where he said five star, seven star. I remember that. So basically it was about where can you just-- If you remove all constraints and you just remove all the laws of physics and you just think from first principles, what's the most extreme positive customer experience you can give? Like what's the most unbelievable customer experience you can give? And you start from there, and then you work backwards from how can I make that possible at scale. That is a better way from starting saying that what is possible for me, that's the best I'm gonna give the customer. But what we realized is that if you nail the customer experience, you get so many other advantages in the business that are impossible to forecast. For example, right, because we nail the customer experience of ten-minute delivery, doing the right selection, doing the right pricing, and doing this mini warehouse model, we got far more throughput and far more volume in our warehouses than people expected. And when you get to such a high volume in the same mini warehouse, all your costs become much lower by nature, right? I mean, without going into too many specifics. And so that was something that people didn't imagine because they didn't imagine that much demand, right? And so when people are pulling the product from your hand instead of you trying to shove it down their throat, right, then magical things happen even on the business side. So at the end of the day, I think it's impossible to m- build a financially viable, profitable business without customer delight. Customer delight is where financial value starts. Starts with the customer.

7. 12:04 – 15:07

   Obsessing Over 100 Customers

   1. JFJared Friedman12:04

      One of the things that I remember that stood out about you, Aadit, during YC was that you were-Constantly trying things and constantly experimenting. Like, this is the first time-

   2. APAadit Palicha12:15

      And failing

   3. JFJared Friedman12:15

      ... this is the first time that I heard the story that the first dark store was literally your co-founder's apartment.

   4. APAadit Palicha12:19

      Yeah.

   5. JFJared Friedman12:20

      And I feel like that anecdote really encapsulates the way that you iterated on Zepto, which is instead of having some, like, grand strategy from the beginning, you just, like, started with this WhatsApp group. You started, like, delivering groceries. When things didn't go exactly according to plan, you, like, iterated on the, like, exact design of, like, how, how you did it, and you just kept, like, tweaking the model and going out there. You did a lot of deliveries yourself.

   6. APAadit Palicha12:41

      Yeah, yeah.

   7. JFJared Friedman12:41

      You were super on the ground understanding what was happening. I guess my question is how did you know to build a startup in that way? H- was it just instinctive to you that that was the right thing to do?

   8. APAadit Palicha12:51

      No, I mean, giving me more credit than is due, I think Jared is also skipping o- over all the failures, right? I think at some point in the batch, I remember one of our group companies, we were, like, the worst or something. We were, like, not able to get any of the tasks done. I remember this very vividly. But, uh, but yeah, I mean, I think the, the s- you know, we, we didn't really have, like you mentioned, a grand insight or strategy. In a way, you know, like Justin Kan says, right? The naivety of knowing how to build a company was a big advantage. Like, we were extremely young and naive, and the advantage of being young and naive is that you don't know how difficult it actually is, right? So, and you don't know all the complex ways that people have tried and failed before. The only thing that was real in front of us was us and, like, the neighborhood do- neighbor down the road that wanted h- her groceries, right? And so when, when you just cut out all the noise, and in a way, being in COVID locked in a room, it cut out all the noise of startups and VCs and this is the way to do it and, you know, read this blog post. It was just like this person just doesn't like us, and we would just sit and talk between ourselves of why doesn't she order from us? Why doesn't he order from us? Why can't we get everybody to order from us, right? And so it was that, like, singular focus on this, like, 30, 40 customers at the very beginning that was super, super advantageous, right? Because it was just a no noise in our life. And so if the only goal that we had was how do we get the 30 people around us to order from us, and that was how all the questions are. So it was nothing else. It's not about VC wants this funding and this guy wants this and, w- you know, this blog post told us to do that. That all was scrapped.

   9. JFJared Friedman14:22

      That, that's super powerful. I, I, I don't know if folks in this room know but, uh, o- o- one of the, like, iconic pieces of YC advice is instead of trying to get thousands of users, just try to make 100 users really love your product. Um, and it sounds like that's exactly-

   10. APAadit Palicha14:37

       Right

   11. JFJared Friedman14:37

       ... how you built Zepto is you just focused on, like, those 100 users and, and that's how you ended up knowing that Korrakaart wasn't the right model and you have to go to Zepto is because, like, those 100 users just weren't happy enough-

   12. APAadit Palicha14:47

       Yeah

   13. JFJared Friedman14:47

       ... with Korrakaart. Yeah.

   14. APAadit Palicha14:48

       Exactly, exa- and so that was the thinking. And, you know, obviously, you know, YC also kept us accountable, but I think the big thing, like you mentioned, is we were able to just create this insulated environment where there was only us and the customer, and then there was nowhere to hide. If a customer was not happy, the, it was right in front of our face, right? And so that was a big advantage.

8. 15:07 – 18:11

   The Hidden Supply Chain

   1. JFJared Friedman15:07

      Most people's experience with Zepto as a consumer is probably, like, like, the app experience. It's like, like, a d- d- a digital product.

   2. APAadit Palicha15:15

      Yeah.

   3. JFJared Friedman15:15

      I'll bet a lot of people here don't realize that you don't really see Zepto fundamentally as, like, a soft- as, like, a, a, a consumer, like, app company. You see it as a logistics and supply chain and, like, traditional retail company. Could you talk about the, um, incredible supply chain and infrastructure that makes it possible for you to deliver, uh, one bottle of Coke to somebody in 10 minutes?

   4. APAadit Palicha15:38

      No, absolutely. So I mean, that we, we, we say this to each other all the time, right? If you remove all the software and the tech and the dark stores, I'll use a bit of Hindi, but if you remove all the software and the tech and the dark stores, fundamentally we're an atta dal travel company. You know, we sell sabji and doodh, right? We basically sell day-to-day groceries to the customer. And if you still talk to the customer, and we still talk to the customer every day, the customer is like, "You're my atta, where I get my atta from, where, where I get my rice from." They don't think of us as some grand, you know, software company and technology company, right? And so that, that clarity is helpful, uh, and that's what we focused on. So j- just to go onto Jared's point, so there's, there's a lot of depth beyond this, just the front end of the application. Like, obviously people are aware of the dark stores, but even within the dark stores, there are hundreds of minute design decisions from the way that you design the selection, the way that you orient the store, the infrastructure that you build there, the way that you build replenishment algorithms, the way that you build, you know, the trucking on the back end, how you manage the tasks. You know, today, thanks to Y Combinator, you know, we employ north of 200,000 people, right? And so how to manage those people efficiently at scale, including delivery partners, pickers, packers, truck drivers. So there's a lot of, you know, efficiency that goes in there, including the back-end supply chain, and, you know, we've talked about it publicly as well, where, you know, we've built out industrial-grade automation on the back-end supply chain. So if we g- are getting, you know, products from a Unilever or a Procter & Gamble or a Coca-Cola, how can we move that through our supply chain with the least amount of people and keep shipping it to the dark stores as fast as possible, right? So it's at the end of the day, a logistics company. There's a lot of hardware robotics. Actually, there's a decent part of our tech team now works on hardware, right? And some of the, like, you know, those videos that we sh- saw today. And so there's a good amount of work that we're doing on the back end. And the thought process there is also not just for the function of, again, right, it starts from the customer. Why am I doing all of this? I'm doing all of the depth in the supply chain only because every rupee of cost you save across that supply chain by becoming more efficient is a rupee you've saved the customer or a rupee that you can invest in better selection, better delivery times, et cetera. And the last thing that I'll mention also for us, the biggest culmination of this is our fruits and vegetables supply chain. Uh, without going into too many specifics, but we run one of India's largest or, you know, at this point the largest fruits and vegetables supply chain, uh, in the country, and we source, you know, millions of units per week from farmers across the country. Everybody from Mahabaleshwar for strawberries or let's say outskirts of Karnataka if you, outskirts of Bangalore and Coast Gold or beyond.

9. 18:11 – 20:05

   Scale & What Zepto Is Today

   1. JFJared Friedman18:11

      Can you give people a sense of the scale that you're operating Zepto at? I mean, the numbers are just jaw-dropping. I just learned today that Aadit, at twenty-three years old, is the largest seller of fruits and vegetables in all of India.

   2. APAadit Palicha18:26

      [audience clapping] On, on the platform. On the platform, yeah. Uh, no. So I mean, we have like a, a decent amount, like Jared mentioned, on the Zepto platform. There's millions of units per day of fruits and vegetables that we sell and of course, all sorts of other products. But yeah, I mean, we're at a point where today we've got a customer base, you know, in the crores, right, of monthly transacting users. There are millions of people that order every day, and we do millions of deliveries per day. Um, and we've scaled to, I mean, you know, publicly available information, right? We've scaled to, you know, tens of thousands of crores of top line or billions of dollars, right? And so from our lens, uh, obviously long way to go, candidly. I think that there is, uh... I mean, we're in the grocery market, and there's a huge amount of scope to run this up, and there's a lot of work that we still want to do on squeezing out more and more efficiency from the supply chain, squeezing out more efficiency on, you know, the consumer part of the business, I think we discussed today as well. But we also have a meaningful advertising business on the app itself, where the top brands in the country like Coca-Cola or Pepsi or Nestle bid on search keywords. So we're doing, you know, hundreds of millions of ARR in ad revenue today. So there's so many big opportunities in the business, and right now we're growing quite fast. And so we think that we still have a few more years of high growth and high amounts of operating leverage and efficiency that we can unlock and new big things. Like, for example, this ads business, you know, was very small two years ago or inconsequential, and now it's become a very big part of our journey. So there's a long way to go, but, uh, you know, we, we're still in day one.

10. 20:05 – 22:44

    The Long-Term Vision for Zepto

    1. JFJared Friedman20:06

       Can you talk about the long-term vision of Zepto? I think a lot of people maybe haven't really thought about what Zepto could become in the future, and I think it'd be really interesting to hear what you imagine it could be in ten or twenty years.

    2. APAadit Palicha20:18

       Yeah. So the way that we, the way that we look at it is we want to build an urban grocery platform, and we want to build urban grocery infrastructure for the country. If you look at it, every, you know, major country in the world has their own form of grocery infrastructure, right? Or, you know, logistics and supply chain and retail infrastructure for day-to-day goods, right? People in the US or people in Europe are buying much more sophisticatedly, right? Their costs are much lower. The sophistication they have on quality control is better. It's much more organized, right? We basically think of ourselves as an organizing force in the grocery supply chain in the country. Obviously, we deliver a delightful experience to customers. But the, the big vision is, I guess, over the next four or five years to be a large grocer in the country and do that in the top forty, fifty cities. And if we can do that, then I think we can build India's like homegrown version of Amazon or any other e-commerce platform, right? We want to build, you know, an e-commerce platform that's unique to India. And if you look at the key, nobody's really been able to do this hyperlocal e-commerce format anywhere in the world, right? We think it works beautifully in India. We think it's the right model for India. Um, and so if we crack it, then we can build a very large outcome and hopefully also play a part in, you know, growing other businesses along with us. I think one of the other key things that I'll mention is that, you know, Zepto and all these other quick-commerce platforms, not just Zepto, have become a platform for a lot of startups to build their own consumer brands, right? And so, you know, eventually down the road, if we can create ten more large outcomes in day-to-day consumer brands, maybe someone here will start a consumer brand. Uh, why not? You know, that happened in the US forty years ago with a Walmart or a Costco and all these other players. We are still at the beginning of that journey, so we want to be part of that journey. The last thing I'll mention, of course, is the people that we employ on the ground. I think if we keep scaling this business, we keep creating more employment on the ground, and we think it's a wonderful thing. I, I, I'll thank, you know, Jared here. I told Jared that, you know, everybody wants to meet Y Combinator because they think of YC as a very good positive force. A lot of people have told me that all these investors are creating lots of jobs in the country, and we-- it's true. You know, so, so yeah, we are-- we're here creating employment, helping build a small part of India's infrastructure. So that's our thought process.

    3. JFJared Friedman22:40

       [audience clapping]

11. 22:44 – 25:35

    How Zepto Uses AI

    1. JFJared Friedman22:44

       Um, so next I wanna talk a bit about AI. So even though Zepto got started before the whole AI boom, you guys are now really deep into implementing AI at Zepto and really on the cutting edge of like what companies here are, are, are doing. Uh, you, you were telling me this morning about all the ways that you transformed your internal operations with AI. Can you talk about like what's-- how, how, how you guys are using AI, how it's changed things for you?

    2. APAadit Palicha23:10

       Yeah, I mean, I think so there are two parts of it. Obviously, there's the customer side, and there's the supply chain side. And so from our lens, there's a lot of work that we've done on this, on the supply chain side. So for example, we, we showed Jared today one of our dark stores, and you're basically walking through how it used to take a team of people, you know, days to manually forecast the entire supply chain. But now we've built out a machine learning algorithm that runs, you know, millions of units per day and doing forecasts without any humans in the loop. And what that's made is that made-- that's made my supply chain more agile. I'm able to dispatch faster. I'm able to do more throughput in the same place because my forecast accuracy is so high, and I'm able to forecast much faster. So it's purely as a function of a lot of work we've done on the machine learning side. On the consumer side, one of the big benefits for us has been the ads business. So we've seen a big bump in ads over the past two years because a lot of products that we're building for our brands are AI-led. So let's say on the search platform, for example, there are lots of things where we're giving people the opportunity to generate keywords, or we give them sort of-- we've built out a model that helps you accurately predict what keyword is gonna give you the best ro-return on ad spend. And so there's a lot of work that we've done there, but we've seen huge results because once brands see that-Their marketing dollars are getting put to use in the most optimal way, and they can see that objectively in their advertising efficiency spends, like return on ad spend as we call it in the industry. And it's been a huge bump in advertising revenue. So building out the search stack of advertising with GenAI tools has been massive. And the last thing that I'll tell you is internally. Internally, we've been able to achieve a lot more with less headcounts. Like in our corporate office, hopefully some of you, you know, have interacted with our team, but, you know, in our corporate office, we've been able to do a lot more with the same headcount. You know, the engineering team that we've had-- I mean, obviously everyone says this, but I see this on the ground, and it's still mi-mind-blowing to me. The amount that we're able to build with such a smaller team is crazy, especially like all the SaaS builds that we used to have. I was telling Jared this, and I can say it publicly. We've cut almost all our software spends to zero. We've cut, you know, a lot of our managed services spends. We've been able to reduce a lot of inefficiencies and manual tasks in the system, right? That were happening with people. We've been able to automate it now. And so my overall organization, if you walk into the Zepto office, there's so many more tools that are automated, and there's no outsourced tools at all. So we're saving like literally hundreds-- I mean, huge amounts of costs on that, on that side. So it's great for us.

12. 25:35 – 26:12

    The Engineering Team

    1. JFJared Friedman25:35

       What is the software team like at Zepto, and are you hiring?

    2. APAadit Palicha25:40

       Yeah. We've got about five hundred or so engineers, another hundred and fifty people on data science, analytics, uh, product management, designers, et cetera. So, you know, we are very much hiring and, you know, actively in the market always for the best talent. So if anyone here is, is keen, let us know. You know, we're still very much at the beginning of the journey. We consider ourselves an early-stage startup, so we're not a big, old, slow company. So if you're exci-excited to come into a startup environment, please do join.

13. 26:12 – 28:56

    How Aadit Kept Leveling Up

    1. JFJared Friedman26:12

       Okay. And we're, we're running out of time, but my, my last question for you, Aadit, is in order to run this company, you had to master an incredible number of skills, and you had to do it at a very young age. I mean, you started this thing at seventeen, and now you're running like a massive cold storage supply chain. You've got trucks and warehouses and physical sorting machines and two hundred and fifty thousand employees you have to manage. Um, how did you keep upgrading yourself as a person and a founder, keep learning these skills so that you could like do this incredible work at such a young age?

    2. APAadit Palicha26:48

       Again, [chuckles] you know, very, you know, that's a, that's a very generous way of looking at it. I tell the team this all the time that it's good that we're a Y Combinator company because I've got exposure to what's happening in Silicon Valley. And after everything we've done, we feel like peanuts compared to what people in the US have done sometimes, right? You know, like Uber or DoorDash or Airbnb, so a long way to go still. But I think the, the big thing for us has been that, I mean, both Kewal and I have just been incredibly lucky with the people that we've been able to surround ourselves with since the earliest stage and, you know, without exaggeration, since the group partners that we had with you and Tim and, and Surbhi at Y Combinator. Um, but every stage of the journey, we've just been lucky to have incredible people that have been surround-- that have surrounded us that we've learned from. And most of them, most of that learning has come from our management team. So I think what the, the luckiest that we've been is that we've been able to find a team, whether it's our CFO, our chief operating officer you met today, our CTO, you know, our head of growth and marketing, our chief business officer, our, you know, leader in the product function. All of these people who got decades of experience but are still hungry and believed in the vision very early on, despite being much more senior and tenured than us. Having them join early in the journey and learning from them was the biggest one. So I think we woke up every morning, and we said, you know, "If I'm working shoulder to shoulder with this exceptional leader in finance and this exceptional leader in operations, then I need to pull, pull up my boots, right? And I have to learn from them." So you just have to be-- You just have to surround yourself with people that are smarter than you and just keep learning from them and keep asking. And I-- even today, like with our finance team, for example, I ask the most basic questions. How does this accounting policy work? Or the ops team, I ask them, "How does this hardware, software work?" So, you know, we also have looked very stupid a lot internally, but then that's been good because we shamelessly ask questions, we shamelessly learn, and then you end up aggregating information from a lot of people, and then you grow. So surround yourself with people that are smarter than you and learn from them shamelessly, as, as simple as that.

    3. JFJared Friedman28:49

       Aadit, I and everyone in this room is in awe of what you've accomplished. Aadit Palicha, everyone. [audience clapping]

Episode duration: 28:57