Instacart CEO Fidji Simo on continuing to deliver great food with just the click of a button

On this week’s episode of?Fortune’s?Leadership Next ?podcast, co-host Ellen McGirt talks with Fidji Simo , CEO of Instacart , about keeping the needs and safety of her company’s frontline workers top of mind and battling food insecurity. They also discuss Simo’s belief in the company’s future even after a massive drop in valuation, why she never let the challenges of entering the male-dominated business world put her off, and how to put soft skills to work to build a company up.

Listen to the episode or read the full transcript below.?

Transcript

Alan Murray:?Leadership Next?is powered by the folks at?Deloitte , who, like me, are super focused on how CEOs can lead in the context of disruption and evolving societal expectations. Welcome to?Leadership Next, the podcast about the changing rules of business leadership.

I’m Alan Murray. I’m here with my amazing co-host, Ellen McGirt. And Ellen, I left you alone for this episode.

Ellen McGirt:?I know you did, and we missed you very, very, very much. This was absolutely, in so many ways, the perfect conversation for you, because we had heavy-hitting finance to get to, but we also had the state of the world to talk about. So, we missed you very much.

Murray:?Yeah, you were talking to the CEO of Instacart, which is at a fascinating pandemic rise. I think at one point, it was thought to have a valuation of around $40 billion. Today, it’s a fraction of that $15 billion. So, quite an up and down during the pandemic delivery boom.

McGirt:?Right. And it was it was an interesting thing to watch. Probably not an interesting thing to think about leading. Fidji Simo, who’s the CEO, as you mentioned, has just passed her one-year anniversary in the job. And I have to say, she was a fascinating conversation. Investors, of course, agree with you that Instacart’s valuation is not only diminished, but actually up for debate. But you may not be surprised that she’s optimistic about its current future.

Murray:?So, Ellen, I was excited about this, because of Instacart’s rise and fall. But why did you think it was important to have Fidji on the show?

McGirt:?Alan, as you know from our reporting, there are just not enough women in top positions in business, and they often?don’t tend to last , especially if there’s a turnaround situation. So I was curious to learn how she was planning for that. But her resume is just incredible. She left her position as head of the?Facebook ?app to lead Instacart, and in addition to all of that, I find her perspective on fighting for inclusion in the industry and beyond. And Alan, you’re going to love the stakeholder piece in particular. She’s committed to using Instacart to address food insecurity, which is a pressing social issue if there ever was one.

Murray:?I can’t wait to hear more. Let’s dive in.

[Music]

McGirt:?So before we begin, I do have to absolutely confess my Instacart usage. It’s off the charts. You’ve saved me many, many, many hours of shopping, but mostly you’ve saved me many, many hours of worry. I’m at my mom’s house, like so many of us, in the middle of caring for many generations. She’s 92, very frail. The last two years have been just awful. And wherever she was, at the hospital or in a in a facility, or now at home, I’ve been able to reach her and her caregivers with food and groceries with people I could trust, from places I could trust, when I couldn’t be there. So I would be remiss if I didn’t say thank you for that. And I bet you hear stories like that all the time.

Fidji Simo:?Well also thank you, Ellen, that warms my heart to hear that. And yes, I mean, our core mission is to give people access to food. And so we see a lot of these different stories, whereas this access is really pretty cool. I mean, the other day, I had friend who told me that his mom has multiple sclerosis and that he felt that Instacart gave a little bit of her independence back, so that she wouldn’t have to rely on other people to, you know, to get food for her. And so all of these stories are just so in line with our mission and you know, that’s that’s the reason I joined the company. So definitely lovely to hear that.

McGirt:?So we’re going to dig into all those details of the mission and the future of Instacart. But you are rising to the top spot at a very important company at a very tough time in the world. But also for women in top spots, this is really a challenging time. So let’s let’s start with you first, and get to know a little bit about your journey. So you mentioned where you grew up. And it is an extraordinary story. Not a lot of tech companies CEOs come from a fishing family in the south of France, but you did. Could you tell us about that?

Simo:?Yeah, so I grew up in a family of fishermen, across multiple generations, and dad’s a fisherman, grandpa, great grandpa, all my uncles, my grandma’s a fishmonger, and none of them in my family ever graduated even from high school. I was the first one to graduate from high school. And so you know, the thing that that I always thank my parents for is that despite, you know, humble, upbringing, they always instilled in me this notion that with hard work and a great work ethic, anything’s possible. And so, you know, I basically worked very hard and ended up studying at the top business schools in France and then, you know, really traveling for the first time when I was in my late teens, because with my dad’s job, we never had an opportunity to travel. And kind of fell in love with the U.S., felt like I should pursue my American dream. Definitely influenced by [inaudible] the California soundtrack of The O.C., you know, [singing] California, here we go. [end of singing]. It worked out, so I’m extremely happy to be here.

McGirt:?I’m going to ask you a big question about when you knew you were ready to run a big company. But I read a wonderful interview with you where you talked about your work and your management style. But before you answer the question, and to prepare for the interview, I just love thisL You called your team at Facebook and asked how they would rate your core competency, which I thought was just a wonderful, smart, open thing to do. And here’s what they said: “Simo has the uncanny ability to juggle many important projects in three areas without losing focus.” I would add to that your openness to feedback as well. But how has the work that you did on Facebook and all of the things that you’ve tackled, which were huge problems with huge ramifications, and, as I mentioned, a troubled time in the world. How does that prepare you to run a big company?

Simo:?Yes, great question. I think it prepared me so well in a lot of different ways. The first one is, you know, Facebook’s growth really came from building the absolute best products. And a lot of what I bring to Instacart now is a product mindset, where it’s more going to win for products. And so, if you look at the last year, we’ve, you know, we’ve massively increased the number of features that we release and really transformed user experience. So that’s always going to be a focus of mine, and I’m really lucky to have learned that at Facebook.

The other thing is really anticipating, you mentioned, you know, leading Facebook [inaudible] at troubled times and anticipating all of the ways in which technology can go right, but also the ways in which technology can go wrong. And really thinking of technology as as a means to an end, as a tool that can be incredible if put to good use, but can also be dangerous if not. And so, you know, my teams now can tell you is, that I obsess over like, can we make sure that every interaction between the customer and our company, a customer and our shoppers, is really going to be the best that it can be? How can we be proactive in preventing abuse? And so that definitely came from Facebook as well.

McGirt:?So before we get to the long term, it’s time to talk about the short term, because you joined as CEO at a really critical time in the company. Like a lot of companies that enjoyed a pandemic boom, it has subsided, there’s renewed questions about competition. Are you going to have warehouses? Are going to continue to deepen relationships with grocery stores and other other vendors that you work with? And of course, the financial future of the company, even go public, I know you can’t say anything about that, but I know what’s on your mind. So can you tell us about those first 100 days?

Simo:?And then the last thing is that for having worked, you know, directly for Mark for 10 years, so things that I learned that Facebook was an incredible long-term focus, where you don’t really focus on just the next quarter or the next half, but you have a 10-year vision of where you want to bring the company. You know, in my first year I didn’t talk about what I brought, we just celebrated our 10th anniversary as a company, and we spent the entire day talking about how we wanted to transform the industry for the next 10 years, and how that was going to have a positive impact on all of our constituents. And so that’s that’s definitely something that’s that’s deeply ingrained in me.

So for me, you know, I really didn’t expect to leave Facebook in early 2021. I kind of fell in love with Instagram because I first joined [inaudible] Instacart in January. The thing I most fell in love with was this idea that we were going to be the company that is at the heart of the relationships that people have with food. That’s an incredibly privileged thing to do that we bring food to people’s tables. I think that food is the center of so many of the biggest issues. It’s at the center of issues of health. It’s at the center of issues around climate. And when we are a company that can literally give people more access to foods, that can nudge them towards healthier outcomes, this is actually a really big opportunity to impact on all of these problems. And so, for me that mission is the thing that really inspired me.

Now is it going to take some time? Of course, but that’s why we invest for the long run. And when it comes to the to the short-term environment, I think everything that has happened in the last year as almost like, I would say, reinforced my belief in the role that we can play. If you look at you know everything that’s happening with the supply chain, everything that’s happening with inclusion, it is reinforcing these notions that grocers do need a?technology partner to execute on that digital transformation so that technology can make the supply chain more reliable, so that technology can make grocery delivery more accessible, because mostly delivery shouldn’t be a luxury—it should be accessible to all, and this is a problem technology can solve. But grocers during this time are very focused on selling to customers,?making sure products on the shelf and doing the things that they’re best at. And we can be their partner in bringing technologies to the tables that can help them really solve even bigger problems.

McGirt:??want to stay on this for a second, because as someone who works for a magazine that publishes lots of lists, I’m always struck at how few women run big companies. I think that latest Fortune 500 it’s about 1%—I don’t have that right in front of me, but it’s a very low number. And I think about the Silicon Valley and I think about the tech bro culture of many, many, many decades. And I think about the extraordinary opportunity it is for the daughter of a fishing empire who now sits at the helm one of the most except exceptional multibillion-dollar-value companies, tech companies, that sits in such an intimate place in the world. And you’re right, that last-mile delivery between a family and their food is really really important. Do you have a sense that unlikely executives with a vision and a track record and the work ethic which you mentioned are going to be able to succeed in Silicon Valley or in big companies going forward? Is something shifting in the zeitgeist that lives people of color women, anybody from not from central casting, more likely to succeed now?

Simo:?You know I wish I could [inaudible] with even more conviction. I do think that this is shifting because now we’re at least having the conversations. You know, it’s interesting. I’ve always had a difficult relationship with with this debate, because on the one hand, I see putting a very big spotlight on the issues and the challenges that that women and people of color face is incredibly important. On the other hand, I think we need to do it in a way that’s also inspiring and not discouraging for these people.

You know, I went back to my high school a year ago, and I gave this talk. There was this woman in the room that said, you know with everything that we were hearing about women in tech, it feels like we shouldn’t even try. It’s so hard. It was so heartbreaking for me because I was like no, I mean, was it hard for me? Of course. We all have, like stories we can all talk about discrimination, but by focusing on my goal and trying to look at what makes me unique and try to turn that into an advantage and never seen of myself as a victim, I was actually able to overcome that. And was it harder for me, for sure, would it be even harder for people of color? Absolutely. But I hope that we can provide models and examples to people who feel [inaudible]. Otherwise, it’s just like there [inaudible].

McGirt:??Yeah, it must have been a thrill for you to go back to see your high school too.

Simo:??Yeah, it was it was really fun.

[Music]

Murray:?I’m here with Joe Ucuzoglu, the CEO of?Deloitte ?US and the sponsor of this podcast for all three of its seasons. Thank you for that, Joe.

Joe Ucuzoglu:?Pleasure to be here, Alan.

Murray:?Joe, business is facing so many challenges these days, the continued pandemic, the battle for talent, supply chain problems, rising inflation and now on top of all of that war in Europe. How are companies responding to all this disruption?

Ucuzoglu:?Alan, you’re seeing a remarkable level of optimism in the face of so many varied challenges. And by and large, I’d attribute that to a recognition that this is just the new normal, the constant curveballs that will be thrown at us. But at the same time, given how successfully so many of these organizations have navigated through these things over the past couple of years, a growing confidence that we’ll be able to continue to navigate the issues that they’re throwing at us and grow our businesses. But to do that we are absolutely seeing a new brand of leadership emerge, grounded in resilience, in agility, in a learning mindset. These are the most important leadership attributes in an environment where we should just expect that change and disruption are going to be at a consistently high level of intensity.

Murray:?The problems aren’t going away, Joe, right? You have to manage through them.

Ucuzoglu:?I had a CEO say to me recently that, if you put together a list of the top 20 risks one week, something big is going to hit the next week, and it probably isn’t even on that list. And that’s just a reflection of the number of different phenomena in the world right now and the level of complexity that businesses are managing through.?

Murray:?Joe. Thank you.?

Ucuzoglu:?Alan, it’s a real pleasure.

[Music]

McGirt:?I want to dig in a little bit to the vision and the hard problems you’re trying to solve, and stakeholderism. We spend a lot of time talking about the broader stakeholders that business leaders need to think about to lead today. And you mention healthy food and accessibility to food and that this should be a right and not a privilege. I’m curious, it seems that’s your stakeholder issue. I spend so much time staring at my Instacart app,?that I notice when SNAP and EBT payments became possible, and that seemed to be a pretty big indication of where you’re going with all of this. What’s your vision for food and food insecurity? Here but also around the world.

Simo:?So, so the thing that’s still completely is that there are 23 million Americans right now who live in food deserts and 30 million kids who are in food insecure homes. That seems insane in our day and age. That seems a problem we should be able to solve.

And the good news is that when you look at online grocery delivery, it does two very big advantages on this problem. One is that it can turn food deserts into places where you can actually get fresh food to because now we actually cover 96% of the U.S. with at least one option for fresh food, fresh food delivery for Americans, and so it just literally gives access to food. And then the second thing is that we’ve actually done research that shows that when you have access to online grocery delivery, you also make healthier food choices. You buy more fruits, fruits and vegetables, for example.

Simo:?And so I think we need to attack kind of both problems. First is a problem of access. And then second is a problem of like food choices that you make because they have a massive impact of unhealth. We know that poor nutrition is a very big driver of poor health outcomes. And so for us it’s really about attacking the problems on both of these factors. During this time in particular, it’s really important because we are seeing, you know, that Americans are putting less food on the table, because of inflation and everything we’ve done with Instacart is gives them access to better discounts on on grocery, give them access to lower-cost retailers and access to bulk retailers like?Costco , BJs, Sam’s Club, all of which are on our platform, and then also gives them access to ways to pay that helps them. As you mentioned, a pioneer in bringing SNAP program online. And what we’re seeing is these populations really finding a lot of benefits to online delivery, because it can manage their budget better. Very often they don’t have access to transportation, so we save them on transportation costs and we we also allow them to really control all parts of their experience and not have the stigma to pay with SNAP at checkout. And so there’s a lot of benefits to moving a lot of the industry online and allowing access to a lot more people, and we feel incredibly strongly about that.

McGirt:?But 96% across the country have at least one option. That’s a really big number. How much room is left to grow adoption of online grocery delivery? How do you think about deepening your reach and growing your market?

Simo:?If you actually look at online penetration, the grocery market was about 3% online pre-pandemic and has grown to about 10% online post-pandemic. If you look at pretty much every other category of commerce, they’re at 25% to 30%. So grocery is still vastly underpenetrated online. And we think we still have a 3x gross in front of us, in the next, like five years. And so it’s the largest category of commerce and it’s the least penetrated online and that’s what’s fundamentally going to drive our growth, especially since we already partner with 800 grocers that represent 80% of the grocery industry. So it’s really about you know, putting the service in front of more people and showing them the value.

McGirt:?And how do you think about the future of your drivers? I’m sure there’s a drone delivery conversation somewhere out there coming. But for now you’ve got a big chunk of people who are coming to our homes. They’re part of the gig economy. How do you think about keeping them safe, but also how do you think about helping them grow their incomes?

Simo:?Yeah, it’s it’s really critical. And in fact, this year, we launched a set of commitments to shoppers, which do include helping them earn on their own terms, because flexibility is critical. And helping them with safety and, and a lot of what we’ve launched, you know, especially, I think we launched more than 15 features in the last six months, have to do with helping them be more in control of their earnings. Like figure out which batch they want to pick and when customers tips, tips taken because that’s something that a lot of our shoppers care about. And on the safety side, we always make sure that we alert shoppers inside the app in terms of, you know, any incident happening in grocery stores nearby. We also launched the ability for shoppers to block customers, because we really want to make sure that we really respect both sides. So the same way in which a customer might have a bad interaction with their shopper or a shopper or whenever really bad interaction with the customer. And also if a customer leaves a poor rating to a shopper, we’ve made it so that it doesn’t impact their future access to work, if the rating was left for an unfair reason. And so all of these things are contributing to shoppers feeling like they continue to have access to flexible earnings opportunity on the platform that provides them with a safety net, as well as a lot of the features they’ve requested for many years.

McGirt:?I want to move into a broader stakeholder vision thinking leadership question that’s going to tap your legendary focus. I should ask one traditional technical financial question. You’ve recently slashed your your valuation by 40%, and your investor stated that it was even lower than that, and I know that you’re walking into an unusual financial situations recession in the air, and there’s been talk about IPO for a long time. How do you think about the financial future for Instacart? How much time are you spending on that? And is there anything that you can safely tell us about what we can expect?

Simo:?So, if you look at our trajectory, we had record order gross, volume growth, revenue growth in 2021, and very strong momentum in 2022. And so when you look at that we’re a company that is fast growing, that has a very large opportunity ahead of us, as I mentioned a second ago. We are obviously continuing to be very focused on delivering great financial results. We think that we have a very solid position. Now in those businesses doing great, but the markets are not doing so hot. And so when you look at the peer companies, a lot of them have gone down for multiple reasons that are market driven. So as a result, we wanted to reflect that even though we are still a private company, we wanted to reflect that valuation in order to be able to grant employees equity grants that will be more favorable to them because they will be issued at a lower valuation. And so you know, I always tell my team, we don’t control the markets, but we definitely control how we react to them. In terms of business strengths, we are clearly happy with our results and we have a great opportunity ahead.

McGirt:?I’m glad I asked. Thinking ahead, we spend a lot of time on stakeholder issues. There’s broader issues of climate change and carbon but also social sustainability, and we touched a lot of a bit on that with your focus on food and healthy communities and the safe workforce. But when you look out and you think about what’s happening long term, there’s war and division, we just mentioned recession, monkeypox, did not have that on my on my dance card earlier this year. How does that impact your long term planning? How does that impact the way that you focus? And more importantly, how you direct the people around you to focus?

Simo:?Whenever my team asks me about that, I always say being flexible in the destination but also very flexible in the journey, because you don’t know exactly how you’re going to get there. And so it’s the same with how I lead the company. It has a long term vision of helping this entire industry that’s in the needs of digital transformation with all of the technologies they need to do that transformation, that’s a ten-year vision. It’s going to help with all the issues we mentioned. It’s going to help with food access, it can help reduce food waste and help with climate. Like technology can really lift all boats and so we are very anchored on that as a long term and that’s not going to change.

However, in the short term, whenever we see some action situations, we always ask ourselves, okay, what do we need to do right now to show up for constituents, whether it’s our customers, whether it’s our shoppers, or retailers or brand partners. How do we show up and do the best job we can in that moment? And you saw the company, do that during COVID were, you know, in the span of a couple of weeks, the business 5x. This is a company that showed up like, you know, recruited more shoppers and made sure that people would be fed and we are very much the same mentality. Now, you know, saying we’re talking to most about right now, out of all of the trends you mentioned, is inflation and making sure that we continue in this moment in time helping people put food on the table and make the service more affordable and help our retailers during this time because technology is also going to help them go through this time. So you know, I think having having a long term like northstar that that you don’t compromise on, but a lot of flexibility short term to figure out has this vision is going to help in the current moment depending on what’s happening is how you maintain focus.

McGirt:?I’m curious about your view on this, because you bring such an unusual mix of leadership skills and management skills and execution skills to the table. But the great adage of leadership is so the thing that you did to get this job is not going to the thing that you need to do to keep it or to get to your next job. So I’m curious as you’re counseling other leaders who are, you know, in the pipeline or just in their journey, what’s the human side of leadership that they need to focus on now? Because I think if we’re going to continue to focus on inclusion and empathy and caring as you are just even talking about food insecurity, I think a different kind of leader is likely going to going to be necessary. What do you think?

Simo:?Well, I love that, that you bring that up, you know, I and and it’s funny because, you know, during my my journey in tech, I have had a lot of people I admire but it’s really hard to find role models in the sense of someone was kind of the same ethos as what I want to bring to the table. And to be honest, that was one of my big motivations for becoming a CEO. It wasn’t you know, like a fancy title and all that it was just like, can I can I take some of that ethos and bring it to the highest job with a responsibility that entails and shows that there’s a way to do business that’s different and results in even better financial results? Because sometimes we think they are odd and we know that they are not and so I love that you’re asking the question. When it comes to like what I advise other leaders, for me, a lot of that has come throughout my career from really focusing on finding the magic in people around me and shining a spotlight on it and then also surrounding myself with the people who see the magic in me because because I think life’s too short to work for people who don’t see that in you. And I think when you do that it comes back to you tenfold and the way I manage teams is always try to look at every individual and tell myself..puts a spotlight on it [this person’s strengths], it’s it’s going to really shine and how do we like how do we create a company that brings that out of this person? And how do we encourage everyone to do that for each other and because when you ask about soft skills, relationships and relationship building is at the core of any human endeavor. We don’t get through it alone. We need other people, and that’s particularly true in companies. And so if you can create this relationship on the basis of mutual admiration for each other’s magic, I think we’ll create amazing companies the perfect place

McGirt:?That is the perfect place to end and I’m so glad I asked. I’m getting weepy again. I started out weepy and I’m ending weepy with you. That’s a sign of a very good interview. Fidji, thank you so much.

Simo:?Thank you, Ellen. It was my pleasure.

Murray:?Leadership Next?is edited by Nicole Vergalla, written by me, Alan Murray, along with my amazing colleagues, Ellen McGirt and Megan Arnold. Our theme is by Jason Snell. Executive producers are Mason Cohn and Megan Arnold.?Leadership Next?is a production of?Fortune Media .?Leadership Next?episodes are produced by?Fortune‘s editorial team.

The views and opinions expressed by podcast speakers and guests are solely their own and do not reflect the opinions of?Deloitte ?or its personnel. Nor does?Deloitte ?advocate or endorse any individuals or entities featured on the episodes.

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