20VC Jet.com's Marc Lore on How To Assess Human Potential and The Resume Test, Why Chief People Officer Should be One of Your First Hires and Why We Need a New Type of Venture Capital

In this episode of 20 VC, host Harry Stebbings interviews Mark Lore, a successful serial entrepreneur and investor, who shares his journey from childhood entrepreneurial ventures to founding Diapers.com and selling it to Amazon for $550 million, then creating Jet.com, which Walmart acquired for $3.3 billion. Lore discusses his approach to business, emphasizing the importance of culture, mission, and hiring top talent, encapsulated in his "VCP" (Vision, Capital, People) philosophy. He also highlights the significance of having a crystal-clear vision and unwavering conviction in its realization, while being adaptable in strategy. Lore, alongside Alex Rodriguez, has ventured into investing through their firm, Vision Capital People, seeding companies with substantial capital to attract the best talent and build valuable technology. Throughout the conversation, Lore candidly reflects on his motivations, insecurities tied to success, and the value of trust and transparency in both business and personal relationships.

• Marc Lore is a serial entrepreneur turned investor.
• He founded and sold four companies.
• He was the President and CEO of Walmart eCommerce US after selling Jet.com to Walmart.
• Prior to Jet.com, he founded Diapers.com (Quidzee), which was sold to Amazon.
• Marc announced his new venture firm, Vision Capital People, with co-founder Alex Rodriguez.
• He invested $50 million of his and Alex's own money into the firm.
• Marc was also a member of the US national bobsled team.

"Most recently, Marc was the president and CEO of Walmart ecommerce us following the sale of his company Jet.com to Walmart for $3.3 billion in 2016."

This quote highlights Marc Lore's significant achievement in the e-commerce industry and his role at Walmart after the acquisition of his company, Jet.com.

• Marc Lore has been entrepreneurial since childhood.
• He wanted to be a farmer and enjoyed creating things from scratch.
• As a child, he engaged in classic entrepreneurial activities like car washing, mowing lawns, and running a lemonade stand.
• His first entrepreneurial memory involves charging his family to listen to his narration of Casper the Friendly Ghost projections.
• He had no connections to the venture startup world after college and went into banking.
• Despite success in banking, he felt unfulfilled and wanted to pursue entrepreneurship.
• He quit banking to become an entrepreneur, investing his life savings and securing his first investment from his former boss.

"I was always an entrepreneur growing up."

This quote exemplifies Marc Lore's innate entrepreneurial drive from an early age, which led him to pursue various business ventures throughout his life.

• Marc left a successful banking career to become an entrepreneur.
• He felt the banking culture was too focused on money and lacked a sense of mission.
• He walked away from a high-paying job to start his own venture.
• His boss became his first investor by contributing $50,000.
• Marc believed he could return to banking if entrepreneurship didn't work out, but he was committed to making it succeed.
• He advocates for entrepreneurs to invest enough money to feel a sense of urgency but cautions against investing all life savings.

"I just wanted to become an entrepreneur and do a startup."

This quote captures Marc Lore's decisive moment of leaving his banking career to fulfill his entrepreneurial aspirations, demonstrating his commitment to creating and growing his own business.

• Marc Lore believes in working with an intense "6th gear" mentality.
• He emphasizes the importance of sleep, even when working hard.
• He admits that some aspects of life, like hobbies and watching TV, may suffer when prioritizing work and personal relationships.
• Marc values making time for romance and believes it's important to maintain balance.
• He suggests prioritizing values like kindness, empathy, and loyalty over solely celebrating achievements.

"I wouldn't recommend putting your life savings in, but I would recommend putting enough money in so that you feel like it's life or death because that's the only way to get into what I call the 6th gear."

This quote reflects Marc Lore's philosophy on the level of financial and emotional investment needed to drive the highest level of commitment and performance in entrepreneurship.

• Marc Lore's childhood experience of associating love with exceptional achievements influenced his motivation.
• He believes this mentality can become an asset with time and therapy.
• As a parent, Marc focuses on instilling values like kindness, empathy, and loyalty in his children.
• He strives for a balanced approach to parenting, celebrating values as much as accomplishments.

"You basically, at a young age, associate being loved with accomplishing big things."

Marc Lore shares his personal experience of how seeking love through achievements shaped his drive, which has implications for his approach to parenting and motivation.

• Marc Lore grew up independent and became comfortable with failure.
• He learned from failures and did not perceive them as significant setbacks.
• His comfort with failure allowed him to take risks without being held back by fear.
• He advocates for learning from failures and improving with each attempt.

"I grew up again with my parents weren't that involved. They had me when they were 20 years old, and I kind of fent for myself, and I learned a lot of lessons myself and failed at a lot of things."

This quote reveals Marc Lore's early experiences with independence and failure, which contributed to his resilient attitude toward risk and fear in his professional life.

• Embracing failure is viewed as an essential starting point for overcoming fear and taking risks.
• Failure is not inherently negative and can facilitate greater risk-taking.

"Failure is okay because that's the starting point of fear. It's like, failure is okay. There's nothing wrong with failing, I think, opens up the possibility to take more risk."

This quote emphasizes the importance of accepting failure as a natural part of the process and as a precursor to taking risks and pursuing success.

• Distinguishing between risking values and risking financial or other assets.
• Values should remain steadfast and not be compromised, regardless of the situation.
• Willingness to risk financial assets remains, but with more caution as wealth and reputation grow.

"I would separate, first of all, reputation and things. Now you start talking about values, and I don't think you take risk on values. [...] I wouldn't put my life savings in again, probably. If I had to do it over again, I wouldn't put 390, maybe I'd put 300."

The speaker differentiates between risking one's values, which should never be done, and risking financial assets, where there might be more room for calculated risks, albeit with more caution as one's financial situation evolves.

• The importance of trust, transparency, and fairness in both corporate and personal relationships.
• Being transparent and open encourages others to reciprocate, fostering deeper connections.
• Trust should be given generously, as people rarely betray it, and the benefits of trust outweigh the occasional risks.

"Trust and transparency, the two big ones, if you want somebody to open up and connect, show them that you're being transparent and you're sharing information, maybe sharing things that are very personal [...] It's okay to be open and be transparent in that way."

This quote outlines the speaker's belief that transparency and trust are key to forming deep and meaningful connections, suggesting that sharing personal information can be a powerful tool for building trust.

• The debate over whether to start with full trust or build it over time in professional settings.
• The speaker advises that being fully trusting from the outset has more upsides, despite the occasional risk of being burned.

"I found, and I'm very trusting, when you openly trust someone, really trust them where they can burn you. Like put yourself in a place where they could burn you. They rarely do."

The quote reflects the speaker's personal philosophy that starting with a foundation of trust is more beneficial than being cautious, as it leads to more positive outcomes and genuine relationships.

• Clarifying the concept of transparency as open sharing rather than blunt criticism.
• The importance of empathy and understanding in communication, especially during conflicts.

"When I say transparent, too, by the way, some people do interpret that as this radical transparency. Like, tell somebody that they suck. That's not what I'm talking about."

The speaker clarifies that transparency is about openness and sharing, not about harsh or radical honesty, which can be counterproductive.

• The speaker advocates for hiring a CPO early in a company's development due to the critical role of culture, recruitment, and employee experience.
• A CPO should focus on creating a culture and environment that attracts and retains top talent.

"You need a chief people officer if you think that, or the CEO or the founder of a company thinks that they can found the company, do the capital, do the vision, do all the parts of the business and on the side with their pinky, do like the chief people stuff. That's not going to work."

This quote stresses the necessity of having a dedicated CPO to handle the complex and vital task of building a strong organizational culture and managing the workforce effectively.

• An effective CPO understands the significance of culture and employee experience in an organization.
• The speaker values CPOs who prioritize the company's mission and values over operational tasks.

"I just think people that understand the importance of culture in the organizations."

This quote highlights the speaker's belief that the best CPOs are those who deeply understand and prioritize the development of a strong, value-driven company culture.

• The speaker expresses skepticism about the value of referencing in the hiring process.
• Belief in the importance of being certain about a candidate's fit without needing external validation.
• References are seen as potentially providing false confidence and should not replace a thorough interview process.

"I need to know without a shadow of a doubt, without having to talk to any other person, I'm that confident that this is the right person for the job and that they exhibit the values."

This quote conveys the speaker's conviction that hiring decisions should be made with absolute confidence in the candidate's alignment with the job and the company's values, without relying on references for confirmation.

• The speaker warns against being charmed by a candidate's personality without thoroughly evaluating their qualifications.
• A rigorous resume review process is essential to identify truly exceptional candidates.

"I don't get honeypotted anymore because I won't interview somebody, or I don't even want to meet them until they pass the resume test."

The quote indicates the speaker's commitment to a methodical hiring approach that avoids being swayed by personal rapport and focuses on objective criteria to assess a candidate's suitability.

• Assessing career progression is critical for identifying top talent.
• Fast promotions within a company are indicative of a high-performing individual.
• Superstars tend to make significant jumps in title level or type of company when they move jobs.
• Lateral moves or lack of promotion over extended periods are red flags.
• The aim is to hire individuals in the top 10% based on their career success.
• The interview process focuses on core values once career success is established.

"Superstars make demonstrable jumps. In either title level type of company. And it's very clear."

This quote emphasizes the importance of significant career advancements as a hallmark of a top performer and is used as a criterion for the hiring process.

• SPOTTIC is an acronym for Smart, Passionate, Optimistic, Tenacious, Adaptable, Kind, and Empathetic.
• These traits are essential for a balanced and effective team member.
• The interview process is designed to assess these specific traits.
• Finding a candidate with both a top 10% resume and SPOTTIC traits is the goal for hiring.

"It's all about spottic. Do they have the traits that I look for?"

This quote clarifies the focus on specific personal attributes during the interview, which are critical for determining the candidate's fit within the company culture.

• Past mistakes have informed a more rigorous approach to hiring, including skepticism of references.
• A superstar resume is a prerequisite for even considering a recommendation.
• Candidates with a history of bouncing between jobs without success are not interviewed.
• The process aims to minimize unconscious bias and ensure objective assessments.

"I guarantee you, that person that had a bad reference, I guarantee they didn't have a superstar resume."

This quote suggests that a negative reference is often aligned with a less impressive resume, reinforcing the importance of the resume in the initial evaluation.

• Owning a significant percentage of a business reduces the need for numerous successful investments.
• Portfolio construction involves fewer, more substantial investments.
• Large initial investments in a company can lead to significant ownership and influence.
• The strategy involves empowering companies through capital to recruit top talent and achieve market leadership.

"You do 15 of those and have 30 million in 15 companies. It's a half a billion dollar fund, something like that, on that order of magnitude."

This quote explains the fund's approach to investment size and portfolio construction, aiming for impactful and substantial stakes in a select number of companies.

• Overfunding can be problematic, but the right founders can handle large investments effectively.
• The goal is to enable founders to build exceptional teams and develop significant technology.
• Strategic acquisitions often value the team and technology built, regardless of the company's revenue or customer base.
• The focus is on investing in people and technology, which are highly valued by acquirers.

"If you've got the very best people in the world in a certain segment of the market, it's always going to be really valuable and interesting to a strategic."

This quote highlights the philosophy that investing in top-tier talent can create significant value for potential acquirers, justifying large initial investments.

• The sale of Jet.com to Walmart was driven by the value of the team and technology, not market penetration.
• Investing in talent and technology is crucial for creating assets valuable to strategic acquirers.
• Startups should focus on proving their customer acquisition cost (CAC) to lifetime value (LTV) before investing heavily in marketing.
• The VCP fund is designed to provide startups with the capital needed to recruit the best talent and increase their chances of success.

"Walmart made the acquisition, that was probably the single biggest reason why they were interested in spending $3 billion for jet. It certainly wasn't the market penetration. The customers that they were buying, they were buying the team and the know how and the technology."

This quote reflects on the Jet.com acquisition and underscores the significance of the team and technology over other metrics, influencing investment strategies.

• Marc Lore does not worry about future events or dwell on the past.
• He concentrates on the present, focusing on making things happen in the now.
• Marc believes that if the vision is right and the team is strong, there's no need for worry.

"I don't really worry about much, like at all. I don't worry about stuff that's going to happen in the future. And I don't dwell on the past."

Marc Lore explains that his lack of worry stems from his focus on the present and his confidence in his vision and team.

• The vision of a company should remain constant if enough work is done upfront.
• Marc Lore emphasizes spending over 100 hours crafting the vision, which should be clear and shared.
• Strategies to achieve the vision may vary, but the vision itself should rarely change if well-conceived.
• A detailed and shared vision is crucial for guiding strategy and ensuring team alignment.

"The strategy can change. So how you get there, the vision shouldn't change if you do the right amount of work up front."

Marc Lore discusses the importance of a well-thought-out vision to guide a company, suggesting that while strategies may pivot, the core vision should remain stable.

• Despite success, Marc Lore still feels a life-or-death pressure to succeed in new ventures.
• His sense of worth and love is tied to his success, indicating an ongoing personal challenge.
• He does not consider having a fallback plan, emphasizing the necessity of success in his ventures.

"I still feel like it's life or death. I still feel like love is tied to whether I succeed or not."

Marc Lore shares his personal insecurities, revealing that despite past achievements, he still feels an intense pressure to succeed in his current endeavors.

• Marc Lore dedicates time to think deeply about the world and his vision.
• He finds that setting aside time to think is essential for coming up with big ideas.
• Reading is less of a priority for him as he feels it detracts from his thinking time.

"I spend a lot of time thinking. I actually set aside time in the day to do nothing but think."

Marc Lore explains his approach to downtime, which involves intentional thinking about his vision and the future rather than focusing on past events or immediate concerns.

• Marc Lore values creating unique family traditions, such as a St. Patrick's Day treasure hunt.
• These traditions become meaningful memories that are cherished and discussed as the family grows older.

"It's funny in the moment, you don't appreciate how meaningful it is until they get older and you look back and you laugh about it and talk about it, and you realize how meaningful it really was."

Marc Lore reflects on the significance of family traditions, emphasizing the lasting impact they have as children grow up and the shared memories they create.

• Entrepreneurs face challenges with different VC funds specializing in various stages of financing.
• Marc Lore expresses frustration with the need to pitch to new investors at each funding round.
• He proposes a VC fund model that can support a company through multiple rounds, reducing the need to secure new investors.

"It's very frustrating as an entrepreneur where you have different funds, specialized in different rounds of financing, and they don't come in seed, and they come in seed, but they can only write a little check."

Marc Lore discusses the difficulties entrepreneurs face with traditional VC structures and suggests a more streamlined approach where a single fund can provide support through multiple stages of growth.

• Marc Lore is excited about untapped opportunities in social and conversational commerce.
• He recently invested in a platform that connects brands with influencers for social commerce.
• The investment aligns with his belief in democratizing access for influencers to partner with brands.

"I think the two big areas still left untapped in retail are social commerce and conversational commerce."

Marc Lore shares his enthusiasm for his most recent investment, highlighting social commerce as a significant and untapped opportunity within the retail sector.