Instacart is having one heck of a year. The company spent $27 million on efforts to help secure the recent victory of Proposition 22 in California, which will shift labor laws that benefit gig economy-driven startups. But prior to their success at the ballot box, the company was already stacking up one achievement after another this year.
In April 2020, Instacart had its first profitable month of operation, an increasingly rare find in Silicon Valley. And successful strategic partnerships continue to emerge; in Q3, the delivery app added retail giants Sephora and Bed Bath & Beyond to its options.
Thanks to additional investment rounds in 2020, the app’s valuation has more than doubled, making founder and CEO Apoorva Mehta a billionaire at just 33 years old. But prior to founding the mammoth grocery delivery app, Mehta was a failure many times over. What was different about his approach to Instacart that made the company soar?
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Over 20 failed startups in a two-year period
Starting a business takes grit. In addition to overcoming bleak statistics – 20% of businesses fail in the first year and 50% fail within five years – being a startup founder requires passion, drive and a good deal of trial and error.
A software engineer by profession, Mehta left his career at Amazon to explore entrepreneurship. He found the challenge of startup culture to be intellectually demanding and stimulating; in one particular business pursuit, he spent a year building out a social networking platform specifically for lawyers.
A critical piece was missing from the equation, though: passion. In an interview with the Los Angeles Times in 2017, Mehta noted that “When I went home, I wouldn’t think about it because I didn’t care about lawyers.” If you’re feeling the same way about your business or side hustle… change something immediately.
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The San Francisco-based entrepreneur loved to cook, and Mehta recalls the inconvenience of having to run around town to pick up certain special ingredients. Just like that, a business idea was born.
Timing is everything
The value proposition of Instacart is nothing new and had even been the business model of publicly-traded companies in the past. But the way consumers were acclimating to smartphone ecommerce was creating a huge opportunity.
Mehta had extensively studied the success and failure of Webvan, a grocery delivery company that climbed to a valuation of $1.2 billion after its 1999 IPO. Less than three years later, that company went bankrupt.
This time was different, though. In observing the steady rise of fellow San Francisco startup Uber, Mehta knew customers were becoming increasingly comfortable with app-based transactions. The timing was right for a new brand to step in and run to the front. Mehta built Instacart’s prototype in about a month, and he even delivered groceries himself at the start to work out any kinks.
Related: 6 Reasons Why You Should Prototype Your Idea Before Developing It
How to develop your next business idea
Passion is critical for any startup success, but it’s important to also know your market and ensure you don’t end up building something no one wants. Here are a few ways to improve your chances of success.
Get the brutal truth. When looking to get feedback on a business idea, the worst thing you can do is ask your mom or a group of friends what they think. Seek out real feedback from prospective buyers.
Stay in the know on market trends. It’s not about what you know — it’s about when you know. Staying up-to-date on trends and technology for your respective industry can help you stay at the front of the pack.
Get hyped about the reason your business exists. How does this business improve the world? If it’s so you can drive a Lamborghini, go back to the drawing board. Having a clear vision and mission for the purpose of your business will become a source of renewable energy and inspiration when times get tough.
According to Mehta, “The reason to start a company is to bring a change that you strongly believe in to this world.” Zero in on the change you want to make, look for market opportunities, and your next successful business idea will be here before you know it.
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