Ricardo Weder, Justo | Reinventing the Supermarket: Building Defensible, Profitable Business Models

The audio and video are in Spanish. These notes are a translation.

It is more common to start a company in an industry you know well, but starting a company in an industry you do not know, while bringing fresh perspectives on how to approach the problems it has, can also be an advantage.

We spoke with Ricardo Weder, cofounder and CEO of Justo, Mexico’s first online supermarket. Before founding Justo, Ricardo held executive roles at technology companies such as Cabify and EasyTaxi. He has also been an angel investor in dozens of startups, including well-known companies such as Nowports and Clara.

To date, Justo has raised more than $200 million dollars from funds such as General Atlantic, Foundation Capital, and Nazca Ventures.

In this interview, Ricardo told us how he evaluates an industry’s potential and what it takes to win. He also told us what characteristics make a business model interesting, such as profitability, defensibility, and appeal to investors. We also talked about what the keys are to differentiating in highly operational businesses.

Youtube Timestamps*

[1:59] - Supermarkets and Consumer

How did Ricardo arrive at the fascinating world of startups?
When he starts studying the supermarket and consumer market, what were the problems that caught his attention the most and motivated him to build a company in it?
The supermarket business has a great many dimensions: the variety and quality of products, refrigeration, packaging, delivery speed, and so on. And there are also very well-funded competitors: traditional supermarkets and apps such as Cornershop and Rappi that serve a similar function, but are not supermarkets themselves. Can you tell us how you analyzed and chose the product dimensions that made the difference in order to win at the start?
An interesting trend in e-commerce is that the big players have more and more control over their logistics. How does Ricardo think about the importance of logistics in his value proposition, and how has the control Justo has over its logistics evolved?

[14:15] - Business Models

If we look at the largest business groups in Latin America and the world, many of them have retailers: Amazon, Walmart, Grupo Éxito, and so on. What is it about retail commerce that is so interesting and attractive as a business model?
How has his perspective evolved on what an interesting business model is in this new context?
What fundraising recommendations would Ricardo give to entrepreneurs with business models that require a lot of capital?
A large part, if not most, of the profitability of the supermarket business happens at scale, but it is quite hard to project that scale and know what the long-term Unit Economics will be. What is his experience building a business in which the Unit Economics are so uncertain from the start, and how does that affect your decisions on pricing, product, marketing, and so on?
Ricardo has worked in marketplaces, e-commerce, and logistics, and you have solid experience on the investor side, both as a banker and as an angel. What makes a business model defensible? And can a startup build defensibility from the outset?

[29:26] - Operations

What would Ricardo say are the 2 or 3 keys to succeeding in a highly operational business?
How does Ricardo evaluate and decide between solving problems by building software versus hiring more people?
When he hires or invests, how does Ricardo identify a good operator? What characteristics make someone a great operator?
Is there any idea about how to operate or run a startup that he has changed his mind about in the last year?

[42:17] - Rapid-Fire Questions

If he had to start a company from scratch, what is the main piece of advice Ricardo would give himself?
What has been the most influential book on Ricardo’s path through the world of startups?
Changes Ricardo would like to see in Latin America’s startup ecosystem