20VC Getir Founder, Nazim Salur on The Future of Last Mile Convenience, Who Will Win Lessons on Driver Acquisition and Efficiency, Zone Maturity and Time To Profitability and Scaling to 300 Cities in the US in 2022



In this episode, the host engages with Nazim Salah, founder and CEO of Getir, a rapid delivery service that has made a significant impact in the market by providing over 1500 everyday items to customers within minutes. With a strong presence in Turkey and a recent launch in London, Getir is eyeing further expansion in Europe and the U.S., backed by over a billion dollars in funding from notable investors like Sequoia, Silver Lake, and Tiger Global. Nazim, who previously founded a tech startup for taxi services, shares insights on Getir's business model, vertical integration, warehouse management, and the importance of controlling the supply chain to maintain their promise of 10-minute deliveries. The conversation also touches on the competitive landscape, consumer loyalty, and the future of grocery delivery services. Additionally, the episode features sponsors like Carter, Secureframe, and Cooley, highlighting their services that support startups and venture capital.

Summary Notes

Introduction to Getir and Rapid Delivery Industry

  • Getir is a leading rapid delivery service provider that distributes over 1500 everyday items within minutes.
  • The company has a strong presence in Turkey, trending towards a super app, and has launched in London.
  • Getir has expansion plans for Europe and the US.
  • The company has raised over a billion dollars from investors including Sequoia, Mike Moritz, Silver Lake, Mubadala, and Tiger Global.
  • Nazim Salur, the founder of Getir, previously launched a tech startup in 2012 for taxi hailing.

"And so with that, I'm thrilled to welcome Nazim Salur at Getir, one of the leading rapid delivery service providers that distributes over 1500 everyday items within minutes."

This quote introduces Getir and its service of rapid delivery, highlighting the company's success and growth potential.

Founding of Getir

  • Nazim Salur had an "aha moment" for founding Getir six years ago while running a taxi hailing app.
  • The idea was to deliver everyday necessities to people faster than the traditional model.
  • Initially, the thought was to carry a couple hundred items in vans, but now they carry 1500 items.
  • The concept was to deliver not just taxis but also other everyday items within minutes.
  • Nazim discussed the idea with friends who became co-founders and/or funders.

"I was at the time the founder of btaxi... And right at that moment, I said, okay, we got this, right, what next? And I said, okay, taxis one need. People have many other needs, why don't we bring them everyday necessities?"

Nazim Salur explains the genesis of Getir, which stemmed from the desire to expand beyond taxi services to meet other everyday needs of people.

Getir's Business Model

  • Getir's model is based on rapid delivery, specifically targeting a 10-minute delivery window.
  • The company controls the entire supply chain to ensure the speed of delivery.
  • The 10-minute model is considered "a different animal" compared to traditional grocery delivery.
  • Getir's service takes only 1 or 2 minutes of the customer's time for ordering, as opposed to the time spent shopping in traditional models.
  • Vertical integration is key to achieving the 10-minute delivery promise.

"The beauty of the 10 minutes lies in controlling everything... It's fast, but 10 minutes is almost now it's a different animal."

Nazim Salur emphasizes the importance of controlling the entire supply chain to maintain the 10-minute delivery promise, differentiating Getir from other models.

Warehouse Location Strategy

  • Location selection for warehouses is critical and is based on proximity to consumers.
  • Getir uses technology and algorithms to determine optimal warehouse locations.
  • The company has developed a method to avoid location choice errors by using data on customer downloads and potential customer density.

"So at the moment, we can't really make a mistake on location choice, because our technology tells us exactly where to put those warehouses."

This quote explains Getir's strategic approach to warehouse location, which relies on data and technology to ensure proximity to consumers and efficient delivery times.

Warehouse Management System (WMS)

  • Getir has developed proprietary algorithms for warehouse management.
  • Nazim Salur is cautious about sharing details due to competition in the industry.
  • The WMS and processes are seen as a competitive advantage that took years to develop.

"Of course, we have devised many algorithms on how to run them. I'd rather not into get too much detail, because these things take many years to build."

Nazim Salur acknowledges the importance of the warehouse management system but refrains from sharing details to maintain a competitive edge.

View on Competition

  • Nazim Salur respects competitors like Gopuff, acknowledging their long-standing presence in the market.
  • He views the influx of new competitors as a sign of a good idea.
  • Salur expects some competitors to become formidable while others may not survive in the long run.

"It's a little crowded now, but because it's a good idea, any good idea attracts crowds, so I'm fine with the crowds."

Nazim Salur expresses his perspective on competition, suggesting that the crowded market is a testament to Getir's successful business idea.

  • The majority of tech startups are based on existing concepts, with over 90% being clones of original ideas.
  • Clones sometimes outperform their original counterparts, especially if the original fails to scale or evolve quickly.
  • Being first to market does not guarantee success; later entrants can dominate, as seen with Google in search engines and Amazon in e-commerce.
  • The goal for startups is often to be like Amazon, maintaining a lead in the market.

"More than 90% of the tech startups are clones of the originals, actually. And sometimes clones do a better job than the originals."

This quote emphasizes the prevalence of replication in the tech industry and the potential for clones to surpass their predecessors in performance.

SKU Efficiency and Consumer Demand

  • SKU (Stock Keeping Unit) efficiency is balanced with consumer expectations in a 10-minute delivery model.
  • Nazim Salur's company experimented with various SKU numbers and found 1500 to be optimal.
  • Too many SKUs can lead to slow-moving inventory and higher costs, while too few may not meet consumer demands.
  • The consumer ultimately determines the right balance through their purchasing behavior.

"So this open secret is 1500 skus. We carry in the ten minute model. So this number, we came up to this number after six years of experimentation with different numbers."

Nazim Salur reveals the result of extensive experimentation to find the optimal number of SKUs for their business model, which balances efficiency and consumer satisfaction.

Driver Acquisition and Working Conditions

  • Driver acquisition leverages existing workforce from related industries such as food delivery.
  • Better working conditions are prioritized over pay, with respect for couriers being a core company value.
  • Facilities like a room for breaks and proper bathrooms are standard in fulfillment centers, setting the company apart in the industry.

"We respect the couriers a lot more than the industry does."

Nazim Salur explains the emphasis on treating couriers with respect and providing better working conditions, which is not common in the gig economy.

Geographical Differences in Driver Preferences

  • While driver acquisition strategies may vary, the fundamental driver needs are consistent across geographies.
  • Couriers generally seek to make a living, with some viewing the job as temporary or supplemental income.
  • Delivery workers, especially during COVID-19, are seen as heroes and should be respected for their service.

"Most drivers, most careers, we call them, they're trying to make a living."

This quote highlights the primary motivation for couriers across different locations, which is to earn a livelihood.

Measuring Courier Success

  • Drops per hour is a key performance indicator (KPI) for cost efficiency in delivery.
  • Nazim Salur's company aims for quick delivery times, which requires efficient algorithms and operational strategies.
  • After six months in a market, their warehouses typically reach a mature level of efficiency.

"Drops per hour is the main indicator of cost."

Nazim Salur identifies drops per hour as the main cost metric, explaining how it directly affects the company's delivery economics.

Time to Profitability and Market Growth

  • The business model can be profitable, but growth is prioritized over short-term profits.
  • The digital grocery shopping market is still in its infancy, with substantial room for growth.
  • The strategy involves a "land grab" approach, expanding quickly to secure market share.

"It's like a little land grab is the name of the game, at least for the next few years."

Nazim Salur describes the aggressive expansion strategy as akin to a land grab, emphasizing the need for rapid growth over immediate profitability.

Market Saturation and Investment Concerns

  • The current investment in the industry is small compared to the potential tech sector investment.
  • The market may seem crowded, but it's expected to consolidate to a few key players in each city.
  • The industry is anticipated to attract more investment in the coming years.

"The whole industry just got a few billion dollars. Compared to the amount of money that can be invested in tech, it's still very little."

Nazim Salur contextualizes the investment in the industry as relatively small, suggesting there is much more capital available for future growth.

Regional Market Dynamics and Long-Term Business Perspective

  • There is an acknowledgment of the inevitability of regional champions due to the impossibility of expanding into every market quickly.
  • Learning from mistakes and adapting quickly is crucial for the success of new companies in the space.
  • The industry is emphasized as a long-term business, not suitable for those expecting quick wins.

"So there's going to be some regional champions here because look, I can't do 200 countries within the next two years. It's not humanly possible."

This quote highlights the speaker's understanding of the limitations in scaling their business globally and quickly, implying a strategic focus on selective markets.

"If the newcomers think they can win in three months, six months, boy, they're mistaken. This is not that game."

The speaker points out that success in their industry requires a long-term strategy rather than expecting immediate results.

Consumer Loyalty in the Service Industry

  • Consumers' loyalty towards brands or providers is mixed, with some being loyal and others not.
  • Consumer preferences can be influenced by various factors, such as convenience, product quality, or personal affinity.
  • Loyalty is compared to shopping habits for groceries and clothing, suggesting that while consumers may explore, they often return to preferred brands.
  • Market leaders with a good consumer experience are likely to retain customers in the long run.

"Some consumers are loyal, some aren't, and that's fine."

The speaker accepts the variability in consumer loyalty as a natural aspect of business, indicating a pragmatic approach to customer retention.

"Most people do. Okay, so you probably, let's say you're shopping... for some reason, maybe you like the store, maybe you like the people who work there, maybe you like, maybe it's nearby, maybe the product is better there."

This quote explains the various reasons why consumers might prefer one provider over another, emphasizing the complexity of consumer loyalty.

Importance of Customer Usage Frequency and Basket Size

  • The key indicators of a service's success are the increasing frequency of customer usage and the growing size of their purchases (basket size).
  • Growth comes from not only attracting more customers but also from existing customers buying more and more often.
  • The speaker shares that their company has seen positive trends in these areas over six years in Turkey.

"What's more important is that frequency increases in time and it does increase in time."

This quote emphasizes the importance of growing customer usage frequency over time as a measure of success.

"We saw them buying more from us, buying more frequently, and all the time these numbers are increasing."

The speaker shares empirical data from their experience, indicating that customers tend to increase both the frequency and the amount of their purchases over time.

Market Selection Criteria and Expansion Strategy

  • The company uses a detailed questionnaire with 400 questions to assess new markets, resulting in a "getter suitability index."
  • Factors such as population density, demographics, and buying power are considered when selecting new markets.
  • The speaker predicts that any location with pizza delivery will eventually have a similar service for grocery delivery.
  • The company plans to expand to at least 300 cities in the US, starting with New York, Chicago, and Boston.
  • Maintaining a high level of service during rapid expansion is a challenge that the company embraces.

"We have about 400 questions about a new market."

This quote reveals the meticulous approach the company takes in evaluating potential new markets for expansion.

"Everywhere there's pizza delivery, there's going to be a 1015 minutes grocery delivery service, period."

The speaker expresses confidence that their service model will become ubiquitous, drawing a parallel with the widespread availability of pizza delivery.

Monetization of Search and Consumer Priority

  • The company considers monetizing search results but prioritizes the consumer experience over advertising revenue.
  • Previous customer choices are taken into account when displaying search results, even if a brand pays for prominence.
  • The speaker believes that treating the consumer as the top priority will lead to long-term loyalty and profitability.

"I shouldn't hurt you. So if I know from your previous purchases that you use a different ketchup, when you use the word ketchup or tomato, number one should be the one you use."

This quote emphasizes the speaker's commitment to personalizing the consumer experience over maximizing advertising revenue.

"But in the long run, I'll make more money because I treat you well. You'll keep me as your service provider."

The speaker articulates a business philosophy where prioritizing customer satisfaction leads to long-term financial success.

Own Brand Products and Growth Focus

  • The company has experimented with private labels but recognizes the risks and distractions they can pose.
  • The current focus is on high growth, and diversification into private labels is not a priority at this stage.
  • The speaker suggests that once growth normalizes, the company may consider expanding into own brand products more seriously.

"Are you this white label company trying to manufacture everything this and that? Or are you a tech company trying to give the best service and do the last mile delivery?"

This quote reflects the strategic decision to focus on core competencies rather than diversifying into manufacturing private label products during a high growth phase.

Market Predictions and Competitive Landscape

  • The speaker anticipates Gopuff to be a dominant player in the US market within the next five to ten years.
  • They also predict that Getir will cover Europe and are uncertain about their expansion in the US.
  • A belief is expressed that market consolidation will occur, leaving two to three main players in regional markets, with others potentially failing.

"I think bluntly, Gopuff will be a dominant player in the US and I think they'll be one of two dominant brands in the US. And I think Getir will have Europe covered, we shall see on the US expansion plan."

The quote suggests that Gopuff is expected to become one of the leading brands in the US market, while Getir is expected to establish a strong presence in Europe. The speaker is uncertain about Getir's success in the US but hopes for a positive outcome.

Business Model and Strategy

  • Nazim Salur emphasizes Getir's faster delivery model compared to Gopuff's, which does not offer 10-minute delivery.
  • He suggests that the future of grocery shopping will be predominantly digital, with most of it being same-day delivery and a significant portion within an hour.
  • Salur believes that no single company will dominate the grocery market due to government intervention and market dynamics.
  • He aims for Getir to be a leading player in the markets they enter, never settling for third place.
  • The expectation is that there will be at least three key players in larger markets and at least ten successful players globally.

"Gopuff is a serious competitor, but they're not doing the 10 minutes. We have a faster model. So give us some time to start operations in the US and let us operate for at least six months and then be the jury then."

Nazim Salur asserts that Getir's competitive advantage lies in its faster delivery model, which he believes will allow them to compete effectively once they begin operations in the US.

Information Consumption and Business Awareness

  • Nazim Salur reads about 20 newspapers digitally every day to stay informed about global trends and events.
  • He receives tailored updates related to their business from his team.
  • Salur values being well-informed about world affairs, technology, and trends to understand potential future challenges and opportunities.

"I read at least 20 newspapers digitally every day, but the total 20 is less than 15 minutes. I look at the stuff and if something interesting I will read."

This quote reflects Nazim Salur's approach to staying informed about the world by quickly scanning multiple news sources and delving deeper into relevant topics.

Investment and Growth

  • Nazim Salur discusses the importance of having investors like Mike Moritz who trust and invest in their business model.
  • He highlights the company's track record of meeting or exceeding their projected numbers, which is uncommon for startups.
  • Salur emphasizes the value of learning from others’ experiences and considers Moritz a friend as well as an investor.

"Mike Moritz invested in us, the others weren't brave enough to put their money in a Turkish business. And Mike Moritz didn't see this as Turkish, Egyptian or Malaysian or this or that. He looked at it as, I think, whether this is a good business or not."

Nazim Salur appreciates Mike Moritz's investment approach, which focuses on the business's fundamentals rather than its geographical location, demonstrating Moritz's confidence in Getir's potential.

Challenges and Hiring

  • The most challenging aspect of Nazim Salur's role is hiring good people quickly enough to support the company's rapid growth.
  • He stresses the importance of hiring the right people and making quick corrections when hiring mistakes are made.

"Hiring good people as fast as I would like. We don't grow. Just open up an office with five people, this and that. Our business is end to end."

This quote emphasizes the difficulty of scaling a business that requires a large workforce, highlighting the critical role of effective hiring practices in the company's expansion.

Future Growth and Potential

  • Nazim Salur does not set a limit on Getir's potential growth and is excited to see how the company will evolve in the next five to ten years.
  • He refrains from making specific predictions about the company's size or success.

"I won't answer that. I don't put a ceiling to myself. We'll see where it goes."

Nazim Salur expresses his open-mindedness about Getir's future, indicating a belief in limitless potential and a willingness to adapt to the market's demands.

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