A Product Market Fit Show | Startup Podcast for Founders
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A Product Market Fit Show | Startup Podcast for Founders
He took on Uber & grew Rappi to $5B—here’s why the craziest founders often win. | Andres Bilbao, Co-Founder of Rappi
Andres Bilboa is one of the co-founders of Rappi, the highest-valued app of LATAM ($5B valuation). Now he runs an incubator called Makers and has invested in dozens of startups.
In this episode, he shares how Rappi started with no funding and no network. They added restaurants into their platform without permission and gave cash to couriers to buy meals. Demand was through the roof. But just as they started closing funding and scaling, Uber and UberEats came to compete.
Here's the story of how Rappi found product market fit, and what Andres learned about founder psychology and mental health.
Why you should listen
- How to launch an MVP even if that means giving cash to couriers.
- How to fight off massive competitors like Uber and UberEats.
- Why founders with insane ambition and a relentless drive are more likely to achieve outsized returns.
- How the psychological aspects of entrepreneurship, such as fear of failure and the need for constant achievement, can impact a founder's well-being.
Keywords
Rappi, on-demand delivery, competition, growth, fundraising, founders, ambition, drive, entrepreneurship, fear of failure, achievement, therapy, fundraising
Timestamps:
(00:00:00) Intro
(00:02:53) The Origin of Rappi
(00:06:58) How Rappi Works
(00:13:37) RappiCash
(00:15:55) Colombia's World Class Convenience
(00:18:05) It's a Winner Takes All Market
(00:20:44) Andres' Roles at Rappi
(00:22:27) Competing with Uber
(00:26:00) Crazy Doesn't Cut It
(00:29:51) The Problem is You are What You Achieve but Nothing Is Ever Enough
(00:40:44) Fear is Unproductive
(00:45:25) What is Makers
(00:50:30) One Piece of Advice
Pablo Srugo (0:00)
You think you have to be a little crazy?
Andres Bilbao (0:01)
No, a little crazy doesn't cut it. You have to be absolutely insane. Dude, I always look for people who are crazy. Because if you're not crazy, like a reasonable person builds reasonable businesses and you're looking for an unreasonable outcome. So you can't go with reasonable. But dude, I'll tell you some stuff that I've learned recently. If you wake up in the morning in a panic, that's not normal. It's not standard. And you do not have to live like that. If it's 10 am and you've already berated 1-2-5 people out of fear of all those crazy ass things that happened during your organization or the business. That is not normal and if you can't sleep and it's quite often that you don't sleep that is not normal and none of those are explained by you working at a startup or you being a startup founder. That's just you in your mind.
Pablo Srugo (1:01)
If you haven't heard of Rappi, you've probably never traveled to Latin America because they absolutely dominate over there. They're the UberEats of Latin America. They're worth over $5 billion. They've raised over $2 billion and they absolutely dominate the market. My first experience with them, I was in an Airbnb in Buenos Aires one day and I ordered toothpaste through their app. And as soon as I clicked order, a 10 minute countdown started counting down the time because they guaranteed that the toothpaste would arrive within 10 minutes and not only did it arrive within 10 minutes, it arrived within four or five minutes. It was absolutely incredible. And today we talked with Andres Bilbao, who's one of the co -founders of Rappi. We talked not just about how he and his team built Rappi, but also about what he's doing now on the investment side. And he shares his thoughts on founder psychology, mental health, and what it really takes to build a massive outlier business. Andres, it's great to have you on the show.
Andres Bilbao (1:51)
Thank you very much for having me, man.
Pablo Srugo (1:53)
Dude, I have to tell you, by the way, every time we were just in Columbia for a month with my wife, my wife's from Medellin, and every time we come back from there or from Argentina, anywhere in Latin America, she's like, why don't we have Rappi in Canada? Like, what do we do? Because the experience is just so 10 out of 10.
Andres Bilbao (2:09)
It's crazy.
Pablo Srugo (2:10)
It's just crazy. I remember the first time, and I think you have to experience it yourself to get it. the first time I ordered something using Buenos Aires, and then you see that timer, right? Where it's 10 minutes and it just starts counting down and you're like. Is this thing really gonna get here that fast and it always beats it too, which is just insane.
Andres Bilbao (2:26)
Yeah, it's bold. It's a bold move to show you a countdown and you actually get the thing.
Pablo Srugo (2:33)
That's right. And it always delivers. So tell me, I mean, I'm really curious. Rappi is now, I think one of the biggest successes to ever come out of Latin America, it's, you know, known around the world. How did things start? Like, I think it was what, 2014, 2015 and who was part of it? Because there were a lot of people involved, right?
Andres Bilbao (2:51)
Yeah, there's a lot of people. if you want to go way, way, way, back, because there's kind of the Rappi around the 2014 and then there's the Rappi way back. If you go by 2014, you would say that Felipe, one of my business partners, he saw his stock card raise 41 million dollars. I think it was a Series B or something like that. And we thought that that was all the money in the universe, right? And Felipe said we should definitely do that. And he sort of wanted to quit, but instead of quitting, he said “let's start Rappi”. And that was based off of something -that we had a company before that's called Grubility and Grubility had this outstanding UI. And it was, we basically built software for supermarkets. So we were quite close from delivering supermarkets. And that's why the inspiration of doing the last mile was Instacart. And in that sense, we were pretty strong, really strong with the UI, sorry, not UX, with the UI. But we never did any of the logistics and we always had trouble with our partners. So we're like, okay, let's fix it and let's go do it. let's do a virtual-
Pablo Srugo (3:57)
What was Grubility? , was it an Instacart experience or what did it do?
Andres Bilbao (4:01)
No, it was software for super`-. It was a software house for supermarkets, if you will. We had a product that we would sell to supermarkets, but it was never really a product. We had to build a new app every time. we were never able to productize it. And we were not that great at building software.
if I use a euphemism, we're pretty bad in that regard. So that's kind of the shorter version. There's a longer version that starts around 2010 maybe, where I'm applying to business school and I reach out to Simone and I got admitted to Dartmouth into Tuck, early admission. So I had a bunch of free time and zero risk. So I told them, hey dude, what ideas are you working on?
Pablo Srugo (4:47)
From College? What's in your mind from before?
Andres Bilbao (4:48)
Yeah, from college. Actually not from college. We're from the same hometown from the same town from Cali. It has seven native ish bilingual schools. He went to one. I went to another. So it's a very close knit or small society in that regard that is middle high class, if you will. So I knew Simone since I was 16 or 17 and then we went to college together. And when I got into business school, I asked him, I had this idea of doing grocery delivery via an app. But I remember very distinctly talking about software, because who the heck wants to do logistics? that was literally her thinking. And for a long time, the project was kind of playing around. It wasn't that serious. But then Sebas came in. He bought us significant stakes, Sebas and Mejia. Then Felipe, who's the guy that I just told you about, he was the first employee at Grubility. And then Juan Pablo came in when we launched Mexico. So I basically parted ways and I went to Sydney. Well, I went to work for McKinsey and ended up in Sydney and then I came back. And when I came back, I was running Grubility with Sebas and Simona and Felipe were starting Rappi. And then we all moved into Rappi and then...
Pablo Srugo (6:06)
Okay, so Rappi was that you saw in Succar get so much money for the logistics part and Rappi was your answer to that to just go off and do some of the logistics piece as well
Andres Bilbao (6:15)
Yeah, that's but that's Felipe that sounds very conscientious. It was more dude we should do if the math didn't add up. We're still gonna do it and which and and it wasn't that scientific at all. We were not very good in many respects. We have done different businesses in particular. In particular, Simone is a great entrepreneur. But the story of Rappi is more of a story of mindset, perseverance and growing with the business. More so than a particular set of skills that we had at the beginning.
Pablo Srugo (6:52)
How do you start it? Because it seems very capital intensive. I mean, you see how much Uber raised and DoorDash and all these companies. , did you guys go and do that?
Andres Bilbao (7:01)
Yeah, but remember that we had this software house, sort of software house, and then Felipe got engineers locked up in a farm-ish for two weeks. And that was the first version that came out. Simone raised some cash from friends and from some folks. And yeah, it was always capital intensive. We ended up raising very significant. It was like that time with low interest rates. So yeah, yeah, it's definitely capital intensive. But when it started, it started when it first started, it was just trying to do grocery delivery. I thought it was not going well at all. it was not growing. We're clearly going to go bankrupt. And then someone, maybe Simone, but someone came up with the idea of why let's not just put the best 20, 25 restaurants in Bogota in the app. And once we did that, Like the growth was obscene. was , forget and, and, and your podcast is about product market fit. My understanding, my current understanding of product market fit is doing something or providing a service or as a user, achieving something that before you could not do. It's not about better. It's about impossible. So before you could not get McDonald's at home, but you just could not. And there's a whole bunch of people that would kill for that. And I'm giving you McDonald's because that's an example that you'll relate. But imagine your favorite restaurant in the whole world that you've traveled to. And imagine that all of a sudden you can get that stuff at your place in 45 minutes or 50 minutes, which is the time back then. Today’s things is the same one, but you can get it in your home in 12 minutes. That's crazy, that's product market fit where you couldn't do something that you absolutely love and now you can. And that was the difference between- At least for us in the beginning convenience, which was some groceries to fuck. I fucking love this, which is, my favorite restaurant at home. And this restaurant doesn't even do delivery. You know what I mean? That was when the whole thing changed to this day.
Pablo Srugo (9:16)
And how did you make that happen? how did you convince those restaurants to join?
Andres Bilbao (9:20)
I didn't. You just sent the courier and the courier paid. See, that's the thing that's so different about Uber Eats and Rappi, right? The restaurants on Uber Eats all they have iPads, they're part of the system. But on Rappi, it's somebody just goes, how did you guys think of that? Because that's really...
Andres Bilbao (9:35)
But that was you're thinking early days. Now, Rappi most definitely has tablets, all the systems.
Pablo Srugo (9:40)
But don't you have some places, I could be wrong, but is there not some that are just , they're not part of the network, but you could still Rappi it somehow?
Andres Bilbao (9:46)
Yes, but they're not- They’re the worst user experience. Let's say that you're starting out, right? And you're a bunch of dudes or kids who want to put the best restaurants in Bogota in the app. What are you going to do? Go and talk to each of them, have three months to negotiate. No, dude, you just sent the courier. So you just got the menus, put them on the app, and then people start ordering. And then although Latin American general tends to be quite elitist in my respects and I say this because in some restaurants, not now, but at some stages, they hated the fact that a courier would go into the line and be part of the customer experience. But if you think of it tactically, a dude is there doing the line and pays. you just serve them the food and you give them food and the dude leaves. So at the very beginning, the experience took a lot longer and it's not great in many respects. But it was great in the one respect that is like the key one. You could not do it before.
Pablo Srugo (10:54)
Yeah. It's zero to one might not be the best experience, but it's from impossible to possible, which is a huge transition.
Andres Bilbao (11:00)
And it was on par with other things that you saw in the market. It's compared to today, it was horrible. Like today is fantastic. It's just that compared to the times in the market, it was not, it was not that bad. It was, it's pretty good.
Pablo Srugo (11:13)
And logistically, how did you handle the money piece? who? When did the customer pay and how did the courier pay for the things?
Andres Bilbao (11:19)
That has a ton of iterations, but at the beginning, we literally had to have couriers put money as working capital. It was crazy because they would pay and then you would pay them back. So to be a courier, you have to have $100 of working capital or something like that or $80. That evolved and it got to a point where we give them cards and then they got to a point where they didn't actually have to be part of any of the money flow. And you can imagine all the kinks and the stuff that we had to fix in terms of payments. Payments is extremely, extremely complex, especially in LatAm. And in Colombia, you can wire, this may have changed now, but for many, many years, you can wire money, but you can't take it back. So that's a quite a bit of a challenge when you have disparity in prices. dude, it's a startup like this it starts one way but then it looks completely different and it iterates hundreds and hundreds and thousands and thousands and millions of times. So depending on what month we're talking about, let me get an example the algorithm. The first algorithm you would literally take all the couriers within like a mile radius and show everyone the order and they'd be refreshing the thing all day every day trying to get the order. And we call it the finger wars, right? Cause they would kill themselves to get that. mean, you would think that that's super stupid. , why don't you do step -by -step algorithms?
Pablo Srugo (12:56)
they're just waiting for, and they're trying to click desperately. Like when you're trying to get tickets for a show, like this sort of thing.
Andres Bilbao (13:02)
and then you have the evacuation of the tickets super fast. This is obviously in no way comparable to what we have today, but as a hack to have a pretty efficient assignment algorithm. It's really good for something when you have just a few engineers and want the thing to move fast, it's fantastic. So the thing evolves and it evolves and evolves. And today is hyper sophisticated in many, many respects. It's just not the beginning. Just send the courier, pay him back later and just keep growing.
Pablo Srugo (13:37)
That's the crazy part to me, right? Is that beginning because it seems like you guys hacked a lot like you hacked the way to get supply. And then you hacked the couriers and the payments. you know, the other thing, I don't know if many people realize, cause you know, most listeners here like US and Canada, how much of these payments were cash based back then and in the beginning, was this credit card or was it frankly all cash?
Andres Bilbao (13:58)
Colombia still has a lot of cash. No, so it was, it was mostly cash, but that's, that's one of those things where, where you, ignorance is bliss, you know? So if you want to talk about something crazy. Not even that, talk about RappiCash. we came up with this service, we had this service once that's beautiful, it's called, it's loosely translated Wimps. And in this one, it was just two text boxes. It's , what do you want? Where should we get it? And you would fill out those two and someone would go out in the city and get that thing. And it had a whole bunch of problems.
Pablo Srugo (14:33)
So what's an example of that? an ice cream, an ice cream with this flavor or like-
Andres Bilbao (14:38)
Here's the thing, you can do whatever, whatever, literally whatever. And then people started with a certain frequency asking for cash. I need cash to pay another cook or I need cash to pay some folks. And it started becoming so frequent that we created a UI for , like an ATM, and we literally created RappiCash like that out of that.
Pablo Srugo (15:01)
how does i- is it a lending arm?
Andres Bilbao (15:03)
no, no, no, it's like, is that in the States? It seems kind of stupid to have cash.Right? in China, it's even kind of a social thing. You'll be like, I'll WeChat you and then you give me cash. But here not as much now and even less so in Brazil, but for the longest time you kind of needed cash to pay some people and stuff like that. And you don't want to get out and you're at home. So you'd go into Rappi, you put your credit card and you'd get the ATM and you'd get cash. It's called RappiCash.
Pablo Srugo (15:31)
That's crazy. That's on delivery ATM, That’s crazy.
Andres Bilbao (15:34)
But the crazy part is linked to what you're saying in payments. You clearly know you're shedding payments, and that's why you worry. Because when you don't know that much in payment, you don't worry as much. But when you do, you start getting worried. Imagine the challenges that we had overcoming fraud when you're literally giving out cash.
Pablo Srugo (15:53)
put in a credit card, put somebody else in, get the cash. So many things.
Andres Bilbao (15:56)
But yeah. So operationally, it was very hard, and we had a lot of hardship.
The folks were exceptional and everyone played a great role. And today I'm not on the day-to-day operations in Rappi. I stepped aside maybe a year and a half ago, two years ago, and now I mostly invest. But the company does a phenomenal, phenomenal job of maintaining the value proposition while improving it. Like Turbo. Like now most people don't know this and Colombians don't appreciate it. They don't know that we're world class at convenience in Bogota. if you live in Bogota or maybe Medellin, you cannot have that level of convenience that Rappi provides anywhere in the world. You just cannot. You cannot get McDonald's in 10, 12 minutes. You cannot. Only here.
Pablo Srugo (16:53)
It enables ,to your thing of possible and impossible is like you're cooking and you don't have a lemon. And even in Canada, that stops you. You have to go to the store. Because even if you Uber eats it, it'll be 30, 40 minutes. you got to stop. The cost is going to be $20 lemon. Yeah. But, in the Rappi world, you just keep cooking, you click a button. I swear within five, 10 minutes max, it's showing up at your front door. It's insane.
Andres Bilbao (17:17)
Hopefully you order a bit more than a lemon, but yeah, I don't know if it's not open now, but for the longest time it's open. Because as a marketing ploy, it's phenomenal. But yeah, what Rappi has achieved was Simone, Sebas, Felipe, all the guys that came in with DoorDash. It's just absurd. It's great. And now hopefully Flywheel will keep on driving that virtual cycle and we'll be able to do more and more convenience for folks.
Pablo Srugo (17:50)
And did you, I'm curious, in those early days, did you operate kind of on that cash burn? kind of an Uber Eats or a Door Dash where on the one hand growth is through the roof on the other hand, the unit economics are still not there and you just need ever bigger rounds or was it operated differently?
Andres Bilbao (18:05)
No, no, no, it's just like that. It was just, it's also like an industry dynamic now. Yeah. This is a winner take most market. You're super young for this, but there used to be this show called Highlander where there's this superhero or super tough dudes and when they would run into one another, it kind of recognized themselves. and one would behead the other and then take all their power. And at the end there would be one. That's literally marketplace. That's my delivery. It's like you're killing each other until in the end there's one, maybe two. And with that level of aggressiveness, yeah, of course you have to be exceptional at fundraising as well. Because otherwise you won't make it. Pablo Srugo (18:47)
Was that hard in LatinAm or was it like pretty well recognized even in the early on? mean, today there's so much investment in LatinAm, but like just fundraising big rounds.
Andres Bilbao (18:56)
It was extremely difficult, but Simone and Sebas who took care of that were our world class at that. no, but dude, of course it was extremely difficult. I think we were the first A16z investment in Latam, something like that. We were probably the second company to go to YC from Colombia, third, something like that. We were most definitely the biggest round in Colombia ever. So whenever you're first, it's really, yeah, super hard, super, super. And we were very lucky in that, let's say, I was operating in the States for a very long time. Simone was pretty Americanized because if you, that's just my personal view and my hypothesis. Latam is not like in China where you can not speak English and still raise a shit ton of money, right? In Latam, as a founder, I feel that if you want to raise giant funds, you have to come across as an American or American ish. You know what mean? somehow US educated, there's this need to feel very American. Otherwise, I don't think that you race. That's my -
Pablo Srugo (20:08)
Is that because most of the big dollars are still coming from kind of US firms?
Andres Bilbao (20:11)
Yeah, yeah, yeah. Yeah, most definitely. there's a natural, that's just my view. And I think there's a natural fear of what you don't understand. But if , here's this Stanford dude who has your same slang or this HBS lady or these Colombians but they speak super good English and understand what you guys want.
Pablo Srugo (20:35)
It makes a difference. i mean, it bridges the gap for better or worse. does.
Andres Bilbao (20:38)
I think that's up for worse and worse. for now it is what it is.
Pablo Srugo (20:43)
That's right. That's reality. how did you guys split things up? , what was your role through Rappi? I mean, you were there for a long time. I'm sure it evolved over time.
Andres Bilbao (20:51)
but everyone had different things. I can speak to mine, what I first worked on was the call center. Then the last mile logistics, I ran operations for a bit. Then I ran our largest business, which was soup restaurants. I was there when Uber Eats came in with their tablets and we developed our own and we, I like doing all that stuff. I, I built us the strategy for dark kitchens, for instance, that's a precursor of some of what you see now withTutable. which is this food, food in 10 minutes. Then I ran our second largest business, which was supermarkets. And we did a lot of work on unit economics there and did a wonderful job right before the pandemic hit. Someone put it well. I worked quite a bit in fraud. That's why whenever you say money, I'm just thinking fraud. And I helped set it up and it's super, super challenging stuff. But we got like a street PhD on that and we're really good at that. I worked a little bit on expansion. I created this program where we brought top talent out of undergrad and then developed it. And that's like the precursor of the other thing that I'm working on that's makers, where we essentially, just found great people, had them work for top people within Rappi. And then eventually these guys and girls were like kind of running the company and that's worked really, really well. So that's kind of like the big, big things that me personally, I did at Rappi. But everyone does a whole bunch of shit and people move around and Felipe used to do everything from CTO to what's the biggest problem and I'll go do that.
Pablo Srugo (22:29)
What was it like competing with Uber? Did they ever have a chance in some of the major Latin markets?
Andres Bilbao (22:35)
they did. Definitely. The thing is that you're saying Uber Eats, but it's Uber, right? Cause you can't really decouple. And we did a nice job, especially in Colombia, but in many countries of fending them off. Uber had a wonderful head start via their rides. They're absolutely dominant in LatAm in rides. So when they started doing the UberEats, I think that's a masterful stroke from Kalanick. They saw that business and thought that they definitely should do it. So no, it was extremely hard. They had a shit ton of money. I remember when they got into -
Pablo Srugo (23:14)
Well, that's what I mean. Was it like existential risk for you guys or just another competitor?
Andres Bilbao (23:19)
one was in our Highlander and in the end there'll only be one.
Pablo Srugo (23:22)
Yes, exactly.
Andres Bilbao (23:23)
Whenever one of those shows up, it's absolutely existential. It's not that there's no collaboration. There's no increasing the size of the pie. Like that may happen, but that's not the... Dude, I used to be a competitive swimmer. I was never nearly as competitive as I was in swimming than as I was during my time at Rappi. it's like Olympics kind of level aggressiveness and competition. That's one of the reasons why I like, and this is my very personal opinion, me and Andres Viva was speaking, when people give Kalanick shit over some of the stuff that happened in culture, they fail to understand how aggressive and how demanding the industry is and the marketplace business in that regard is, that you had to have someone extremely aggressive to be able to have even a remote chance of building something like that. So it's really easy to say, there's all this thing that's going wrong. But dude, like I have the utmost respect for a lot of the stuff that people achieved at Uber. And I think that a lot of it had to do with Kalanick specifically and his take no prisoners mentality. And obviously competing with that was extremely hard.
Pablo Srugo (24:47)
Well, I think you're totally right. I mean, he's the one that raised the most money. ended up getting the biggest kind of global marketplace. yeah, Dara has done a lot, obviously, since he took over to polish the brand and clean things up. And he's been a great professional CEO. But you don't get any of that without the crazy competitiveness that Travis brought to the table. absolutely.
Andres Bilbao (25:08)
But it's not that he brought to the table. It's that he built. It's very different. He wasn't like making decisions. He was building. it's very different and companies mature and there are different needs. And I'm sure that the people who work there now are phenomenal and different folks from different stages. I'm just trying to make a point that if you understand, I feel in my opinion, me very personally has nothing to do with Rappi. That if you understand the stressors and what is required to succeed in that kind of industry, it makes perfect sense for someone like Kalanick to have done it. And even then he deserves infinitely more credit than he gets. That's my view seeing it from the...
Pablo Srugo (25:58)
Yeah, of course. You think you have to be a little crazy to cut it?
Andres Bilbao (26:00)
No, a little crazy doesn't cut it. You have to be absolutely insane. then that's actually one of the things that I look for. If you want to transition a little bit into what I do now, which is mostly investments. Dude, I always look for people who are crazy. Because if you're not crazy, like a reasonable person builds reasonable businesses and you're looking for an unreasonable outcome. So you can't go with reasonable. I try and steer very clear of reasonable folks. I'm of the opinion and I may be wrong on this one and maybe it's just because you see the world the way that you are. So that probably speaks more about me than the reality of things. But I think that outlier founders are crazy. Not in general, not on average, like in total, all of them. And I feel that that's the only way they're unbalanced in many, many respects. And they have a very clear set of priorities that drive those, those outsized outcomes and then, and that will them to fruition. So yeah, no, no, no. I'm sure like I've never, I've never met him. I'm sure Kalanick is insane. I have no doubt whatsoever. I saw all my best friends who are founders.
Pablo Srugo (27:15)
What do you look for when you look for these founders like in terms of things that drive them and things that make them want to work as hard as they need to work, anybody needs to work to create outsize returns.
Andres Bilbao (27:25)
I used to say that it was more around ambition like they have this absurd ambition but it's ridiculous like they think that they can buy an island and start a country or They think that they can, I'm giving some example and some stuff that you may have seen from some folks in the internet, but I'll give you an example. I have this friend who was doing this social commerce business. She had worked on Rappi for a very long time and she was just on paper trying to figure out how to do this business and how to build it. And she hadn't raised or anything. And she said, okay, so to get to series A, she had some shit I need like 10,000, I think something like that, 10 ,000 people selling as social commerce leaders. So need to acquire those who can get themselves like 10,000 resellers. He said, that's doable. Like it was nothing. Like she was saying, like it's Tuesday. Getting 10 ,000 B2B low income folks to distribute. That's an example.
Pablo Srugo (28:22)
That's kind of the crazy that you need.
Andres Bilbao (28:24)
Or the crazy ambition. That's not the crazy crazy. That's the crazy ambition. Like I'll give you another example. I recently invested in these kids in Argentina that essentially indexed all the products in e -commerce in Argentina. And then you can now go and search with natural language processing. And now they're about to raise a round and they're doing quite well. And I remember when I asked the dude, I asked him like, okay, dude, so what do you want to achieve? What do you want to build? The guy's 19, no? And he looks at me straight in the eye and goes “I want to kill Google”. was like, okay, here's my money, I don't know about the product. like, you know, that's the kind of, of crazy that, that you want, I feel. If you're looking for like truly outsize. Not like, okay, like truly outsized. So that's one of the things that I look for. But more and more recently when I start learning about or pretending to learn about psychology and the human mind, I've started looking more and more for people that cannot rest until they achieve some grandiose. Like they will never rest and they will never be satisfied until they achieve that. If you're looking for something like those… Absolutely outsized. And in some cases it comes, in some cases it comes with a lot of suffering. Like there are some folks that I like I'll invest in-
Pablo Srugo (29:44)
That’s what I was gonna ask! Like it might make a lot of money, they might build their companies, but like how do they, you know, how do they end up as people?
Andres Bilbao (29:50)
Hopefully throughout the way they work on themselves and feel better. But I've done quite a few investments recently. Back then I didn't think of it like that. But now I think like the right conversation should have been, here's my money, I hope you feel better, something like that. Cause it's tough, not everyone. And remember I started this saying that this probably speaks more of me than of reality. Cause that's the lens through I see stuff right now. But I think there's a lot of instability in many of these folks. And I think that hopefully many of these men and women work through it and then find themselves in a wonderful situation with an exceptional team, great outcomes, fantastic impact and time to work through their shit, hopefully.
Pablo Srugo (30:39)
Do you find that one of the things sometimes is like people who feel like they feel they need that constant extrinsic reward to feel not better about themselves, but like kind of an ego thing. Like I don't know the right word to put on it - Do you know what I'm saying? Like, you know I'm getting at?
Andres Bilbao (30:56)
Yeah, yeah, yeah. I'm gonna give you an ignorant, not psychologists, psychiatrists, therapists whatever, understanding of the situation. We live in a society, especially in founders, where you are what you achieve. So many have this view that if I don't achieve greatness, I'm not great. But then there's also this view that nothing is enough. So it doesn't matter if you're objectively by measure many people are doing something great. You expect to be something even grandiose. I'm going to say something irresponsible here, but like, let's say you changed an industry, right? I'm saying irresponsible, because I'm picking it out of my ass without a true knowledge of the situation. It’s just for remembrance. so I transform an industry. How about we move humanity to Mars? You know? there's always something else. You know what I mean? So, I think that with that paradigm, it's quite easy to understand and to see these people that will tell you that nothing's ever good enough or not good enough, nothing's ever enough. There's always more stuff to do and that's intrinsic. It's external naturally, but then there's also this, I think that at the core for not everyone but the folks that have that view, we basically, what you want to do is avoid being worthless and you do that through achievement. And I think that it tends to be that the level of achievement when you have that paradigm, is directly linked to how worthless you would feel if you didn't achieve. Because if you take it to the other extreme, then you're a fucking Buddha. Just go and breathe and you're fine. “That's right”. You're just, fantastic. You don't need to, it's not chilling because chilling has the implication, a negative undertone that I think at least that I don't know whether you agree with that but, if you're truly content, you only are. That's it. You're not chilling. Because chilling is the opposite of delivering. There's a negative connotation on the chilling. When you're on the other side, allegedly, remember I don't know any of this shit. I have the paradigm of go do, right? You just need to be and that's it.
Pablo Srugo (33:16)
It's funny you mentioned motivations because like what it brings to mind is have this really good friend of mine I've talked about it before, I call him the founder cockroach because like this guy.He was the one founder who just can't be killed. there's nothing that will stop him, right? Like in so many cases when you're running a startup, you're like, man, things are going really not well. maybe we should give up or maybe we should switch it. He would be the last one to give up, right? He ultimately, after three different startups that didn't work, his last one did and he exited for close to a hundred million dollars. So it's a story that ends well. But when I spoke with him and I asked him cause he told me, he's like many times we couldn't raise money. We were weeks away from bankruptcy, I was using my own credit card to pay for things, whatever. And I was like, dude, what actually keeps you going? , how do you not at some point just say, okay, it's not working, let's cut my losses. And his thing was, he's like, I just couldn't fail. Like I couldn't go look people in the eye and say I failed again. it's literally fear of failure that was the motivation.
Andres Bilbao (34:12)
And I'm sure that if you ask two more questions, it'll be a lot deeper. It's like I couldn't fail but like why? Like what does it mean if I fail and then go one more and you'll see it always comes back to or not always, but like if I had to bet, I'd bet that it comes to worthlessness.
Pablo Srugo (34:33)
I think so. I think his self -worth was tied up in that. I don't know.
Andres Bilbao (34:39)
Maybe that was a strong one, but ask him and you'll see. I have a friend who recently had some issues and had to take some time. And I remember that his biggest driver or my understanding of his biggest driver is that he never wanted to feel as humiliated as he felt in like middle school and you would see this motherfucker building a ginormous business with the objective that no one would ever humiliate him or bully or he would never feel like he felt in middle school with some bullying and it's like holy fuck but like hundreds of millions of dollars of business created
Pablo Srugo (35:23)
Well talk about an outsized response, right? crazy.
Andres Bilbao (35:26)
But at the same time, I do need to caveat with this that I've done a lot of therapy, I've done a lot of work and I do understand that there's a scenario where you can achieve all these crazy things out of thriving, not out of surviving. Because many, what I'm discussing here, and that's not my case, like that's why I just talk about sick because I'm sick, right? But what I have learned though, most recently is that your ability to achieve stuff can be very strongly driven by all these traumas. So you have all these adaptations or maladaptations where you're able to do like a fucking workaholic, you know? So like, can have all these compensation mechanisms that are just very productive and you end up producing a whole bunch of stuff and you can achieve a lot of stuff there, but then also, If you should start fixing some stuff to your impact, like you can do like way more and feel way better because these maladaptations are also kinda like you're a mouse in one of these spinning wheels. Let's say you're spinning in this thing and you let go of the wheel and the thing goes super fast. It's like a mouse running through the street. The circular velocity is way higher than the linear one.
Pablo Srugo (36:47)
So you think you're very unproductive even though you might feel every hour, but you could do a lot more with each hour if you were a little bit more balanced or?
Andres Bilbao (36:55)
No, it's like compared to other people, you're extremely productive. But compared to yourself, you're this mouse going in circles at literally like a third of the speed that they could be going if they address the shit that is like hampering them. Because it's a double edged sword.
Pablo Srugo (37:13)
It is, but isn't there the risk too that if you become more, let's say, zen -like or whatever word you want to use, you kind of decide, do I really need to create a billion -dollar outcome? Like maybe I'll just create like a $50 million outcome. Like, do I really need to go for that extra you know what I mean?
Andres Bilbao (37:27)
no, of course. Of course. I don't know . So of course there's a risk to productivity, but I'll give you my very tactical example. Today, I work way less with way better outcomes by the hour than I did, I don't know, four or five years ago. And I'm very clear about the fact now that I have these issues that when I fix them, I'll be like 10 times, like literally like 10 times more productive in terms of outcomes. and the truth of the matter is on this one for me, at least my understanding or my truth on that one, is that if you got to a point where you don't have to be productive and it's a choice, like you already won, you know, like your framework. And your paradigm is so, so strong that you won't admit to a situation where you're not highly productive. But there's potentially this whole new world where that shit just doesn't matter. It just doesn't fit in your paradigm. Because we're like fucking founders talking about founding shit. And the whole idea is like, there's that's the promise that you get out of that. And you can choose to be super productive or not. You can do is to be zen or like Buddha or not! And you'll feel fantastic. And you will just do and be able to achieve whatever it is that you want to. Many of us do shit that we have to or feel that we have to.
Pablo Srugo (38:47)
You’re compelled.
Andres Bilbao (38:49)
Yeah, but compelled why? Because a lot of the stuff, in my opinion, my view, the more that I've researched trauma, the more that I've realized that although I may think I'm free, I'm actually more like a goat jumping from trauma to trauma in automatic. I'm not even aware. So I think that there's definitely like the ultimate response there would be that there's definitely a risk that you are way less productive, but that would be by choice.
Pablo Srugo (39:23)
Yeah, you might decide. I know. And I think that's scary to a lot of people, especially founders. Like I don't want to choose to not be less, I just want to keep doing what I'm doing. You know what I mean? Like I just want to crush.
Andres Bilbao (39:33)
Link that one to my hypothesis in that in many cases and not in all. You don't want to not be productive because your self -worth and your worth is tied to your achievement. So what you don't want to be is not not productive in that specific scenario is not worthless. But in here, you're already not worthless. You're extremely worthy. Then do whatever the fuck you want. You know, my sense here from where I see it is like you're going in circles on the same paradigm. You know what I mean? And I feel, and I may be wrong, that you're not admitting the possibility of feeling great and not having to do shit. And maybe that's fine. It just doesn't register.
Pablo Srugo (40:19)
It doesn't no. It doesn't register. But for those founders, it doesn’t.
Andres Bilbao (40:22)
Yeah, of course. We wouldn't be founders if it kind of registered. Exactly. Some people will listen to this stuff and be a fucking big ball, dude. talking about not doing shit and promoting laziness and that can be like a reaction.
Pablo Srugo (40:38)
That's why I go back to productivity, but okay, show me how it makes you more productive. Cause I know that's the lane.
Andres Bilbao (40:44)
That's why you keep politely challenging me,You know, maybe. There might be other people that say, wow, I hadn't thought of this stuff and how I may be driven more by shame or feeling like I have to do this stuff. But dude, like I'll tell you some stuff that I've learned recently. If you wake up in the morning in a panic, that's not normal. It's not standard. And you do not have to live like that. If it's like 10 AM and you've already berated like 1,2,5 people out of fear of all those crazy ass things that happened during your organization or the business, that is not normal. And if you can't sleep. it's quite often that you don't sleep. That is not normal. And none of those are explained by you working at a startup or you being a startup founder. That's just you in your mind. \
Pablo Srugo (41:47)
Out of those, the first one was definitely the one for me. When I was running the startup, I ran before I was at VC and now things are a lot chiller. every day you wake up and your heart's just “bzzzzz” crazy anxiety of like, holy fuck, the number of things that need to be done and if I don't do them, like, I'm failing and I'm a failure.
Andres Bilbao (42:08)
Exactly, exactly. Yeah, of course. And that is not to say that there's not this tremendous responsibility of managing people, providing jobs. Like I've had to do this massive layoffs and not even in Rappi, like in different places. And it's horrible. It's not like those feelings are not there. Just that, for many of you, will notice that it doesn't matter really how the company is doing. You always feel like shit. That shit's not normal. That is not normal. And with a little bit of, no, not with a little bit, like with a lot of extremely hard and painful psychological work, that gets better. And not just like slightly better, like extremely, like significantly better to a point where those same things that would like just have you go ballistic or go into a panic. They just did not happen. It just doesn't happen. Now it's extremely rare for me to panic. It's like truly rare.
Pablo Srugo (43:12)
You know, going back to one of the things you said, and I don't mean to go in circles, but that you are, you have somehow found that you do 10 times much more now. Like is that one of the reasons why? Because you spend a lot less time worrying or you just in a more productive state.
Andres Bilbao (43:26)
Fear is extremely unproductive. Mistrust, It's extremely unproductive. Self-doubt, extremely unproductive. And all of these things are very closely linked to some potential trauma or conception of yourself that you have. Again, it's entrepreneurship, it's, I think it was Ford that said that the people who think that they can and the people who think that they cannot tend to be right. When you're feeling great, or when you work through all this shit, you start realizing that you can do whatever, like literally. And you start getting rid of a bunch of mental limits and everyone has a- stupid example, but let's say you're raising your fund, right? And it's extremely hard to raise funds as a VC, right? It's like a lot harder than raising for a startup. But dude, I'm pretty sure that your average VC raising a fund will have this mental limits and they'll think that, I don't know, BlackRock would never invest in them or that the Saudis would never invest in them. And then you work through this shit and you go like, dude, I'm worth it. I'm more than capable. I'm able to achieve it. And then all these things start falling in place and when you know it, you have like this tremendous ability to race. And you will look back and realize that most of it was just mental limits. And that's directly linked to this stuff. So when I say that I'm a lot better, it's not because I work more hours. It's just I've gotten rid of a bunch of mental limits. I still have a shit ton. But I'm sure that I get to enjoy a lot more, get to achieve a lot more with way less hours. But I don't like the achievement piece, because it goes back to feeding your view on that one. Like the way that I want to make it is that I just feel a lot better.
Pablo Srugo (45:15)
Regardless of achievement. Yeah, that's right. And then what about the companies you work with, like at Makers? First of all, is that like a standard kind of incubator or like what's
Andres Bilbao (45:25)
I'll tell you a bit about Makers. Makers is essentially this, I use a joke about this. I said that it's kind of like my NGO, but it's not an NGO, it's more like for loss, because I only lose money on it. I've only lost money on it. But in reality, we're making it to this wonderful model. I'm lying. This year itself is ending and whatnot. But essentially what we do is, what I do is I find ourselves when we were 20, 21, 22, and then have them report to ourselves. like imagine you at 21 reporting to or 19 or 20 reporting to you today. And then like just like the curve, the learning curve of entrepreneurship, it's just obscene. It's obscene, right? Via role model. So it's kind of like a decentralized school for entrepreneurship via role modeling. Take out the crypto, no? It's like decentralized meaning a bunch of founders will coach and extract that shit ton of value from mega high performing. undergrads or newly grads or something like that via an internship. And then you just create a community around them. You coach them on a whole bunch of stuff. You give them extra like brand bag lunches like they do in Stanford or all these different activities extracurricular to their internship. And then you just wait and see and all these people start building these phenomenal businesses. You just try and build a community around them, select them really well and select the startups where they go really well. And we've trained maybe -
Pablo Srugo (46:49)
And then you invest in them or not? is the investment -
Andres Bilbao (46:50)
Sometimes. So my brother did one that I just got into NYC, Domu, it's called. It's doing beautifully. It's doing our collections bot, the AI, and they're going to be top bucket in NYC. I've done a couple of investments, but dude, I do this mostly for the good of the impact that it has. Dude, we've trained 450 people already. We're in like 12 countries in Latam. We're going to start doing 200 to 300 per year, they've raised like $15 million. And these are people that you kind of like identify them and they will have this multiplier effect, but it's crazy. And maybe -
Pablo Srugo (47:29)
And you pick them and then you find somewhere for them to intern, like with one of these guys, so you get somebody's company or something like that.
Andres Bilbao (47:35)
And we try and have a really high bar, both on the selection and on the placement. Here's the thing is that Makers is geared towards founders more like myself, who went to university or whatever, but then worked. They don't have to go to university, but worked for a few years at different companies and then decided to start a business. This is a subset of a population absolutely uncovered because it's in no one's track. Like your average VC will have a 10 year lifespan, right? I'm trying to invest in someone, invest time and effort, money. When they're 20, they may start their business at 27. I don't care. It doesn't matter when they started. I just want to make sure that they have this exceptional training and that when they go and do a business, they go for like big. So, and here's a wonderful contradiction, no? I'm talking about being and enjoying and doing whatever you want. And I select a whole bunch of folks that are like, I'm gonna fucking like kill it. You know what I mean? And I look for crazy, you know? So you can see a bunch of holes in everything that I do. That's what I'm doing. And then we'll launch another one. We're about to launch another one called Mavericks, which is for these same folks, but are already starting a business. Because a Maverick will never have a normal job. They're like a founder from the get-go. So we'll create that one all focusing on LatAm.
Pablo Srugo (39:03)
That's awesome, man. And you've had how many people go through it already?
Andres Bilbao (49:06)
The thing is that I never know. I know it's less than 500, more than 400. But I don't have the exact number because now we started taking batches every month.
Pablo Srugo (49:16)
And is it paid? is it free? what's the...
Andres Bilbao (49:22)
I should always say that and I never do. It's always free. Like, I always do all this shit free. That's why I tell you it's like a for-loss. No, no, but now, like, the startups pay a set-up fee. We're getting some grants to kick it off and we've come up with a very cool business model for the thing to work. But, dude, this is not… “Let's make a bunch of money with this.” No, this creates a lot of value for society. and for Latin America in particular, but not, and yeah, we may make a couple of investments that do phenomenally well, but trust me, there's like way better, easier ways of investing than going and trading a couple of thousand kids. You know what I mean?
Pablo Srugo (50:02)
It's a very roundabout way.
Andres Bilbao (50:06)
We can find ways of making money, but that's not, that's not why. That's not why.
Pablo Srugo (50:10)
That's perfect, man. Well, listen, we're coming to the top of the hour, so we'll stop it there. But I will ask you just one last question. We talked about a lot of things. Let me ask you : if you could go back to the early days of Rappi, like when you were just starting out with one piece of advice for yourself, so you could be the role model for yourself going back 10 years. Like what do you think that would be?
Andres Bilbao (50:30)
I'll do it on two counts. One is to do a lot more therapy quickly or do therapy ASAP. And at least for me, it is really hardcore shit that works like psycho psychoanalysis with micro dosing or macro dosing like pretty heavy shit. None of this. I just got this coach and we kind of talk every once in a while that that's not in my opinion not being disrespectful. Coaches are very useful in many many respects. But if you're trying to i don't know overcome stuff with your mom, that's not your coach. You know what I mean? That's the one advice on that side. And that would be kind of like an enabler for everything else. But my second piece of advice is learn about fucking fundraising, dude. Cause you're like, you can have way better outcomes, well, a lot better freedom, larger freedom. Like you can do a whole bunch of stuff. And I actually created a bunch of videos on that. Like I have a YouTube channel that is called fundraisingschool.com. And I literally coach people on everything that we know about fundraising. And dude, I help like 30 founders a year raise. something like that, like a crazy number, right? As a startup founder, it's therapy and fundraising. Those are the two. Well, and if I gave you a third one, world-class recruiting, but we did a really good job with that.
Pablo Srugo (51:49)
Well, you did a good job in fundraising as well. You guys raised a lot of money.
Andres Bilbao (51:53)
Yeah, but there was way too much dilution. There's stuff that we could have done a lot better.
Pablo Srugo (51:58)
Optimizations, yeah.
Andres Bilbao (52:02)
Yeah, but like orders of magnitude optimizations that we could have done. So yeah, that's what. Dude, you asked me,I told you. But it’s therapy, fundraising and world -class recruiting to become even better.
Pablo Srugo (52:17)
I was just giving you props for what props do, dude. Like I see you on the front page.
Andres Bilbao (52:20)
No, no, no, no,But we could have done a lot better. And now that's one of my mini business traumas that now I fixed. Like now I'm phenomenal at that. I feel.
Pablo Srugo (52:33)
Perfect, man. Well, appreciate you jumping on the show.
Andres Bilbao (52:35)
no, no, of course. And it's a wonderful pleasure and congrats on what you're doing. And I hope that people listen, find it useful and get a shit ton of product market fit.
Pablo Srugo (52:46)
I just gave you content that you liked so much. You actually listened to the end and guess what? You didn't pay a single dollar. Not only that, I didn't even put any ads in your face. So you just got a bunch of content for free. And now that I've delivered that value, I'm asking for something in return. Open your app, open Apple Podcasts, open Spotify, open whatever app you use to listen to this and hit that follow button. It's actually gonna help you because it's gonna help you make sure you don't miss out on the next episode, which you liked so much that you listened to the whole thing.
