The Exchanges

Q bigger, broader platform for, you know, local commerce, logistics. You've been expanding into grocery and retail, international markets. I've used some of the other brands that you've acquired, like Wolt and Deliveroo, and which I think is still in the process. Can you tell us a little bit more about Some of the things going on with DoorDash now. What is the sort of the vision for expanding the platform?

A Sure. So, you know, when you and I last spoke seven years ago, we were largely a single product, so restaurant delivery, single geography, United States company, and that occupied, you know, well over 99% of what we did. Today DoorDash Is a business with, you know, five big areas. Obviously, we still bring you lunch and dinner inside the US. We, as you mentioned, expanded about five years ago into other categories, delivering you groceries, convenience items, retail items. We now do this also internationally. So you mentioned that, um, you know, a couple acquisitions that we've announced. We now operate in over 35 countries. We have a B to B business where we help you do delivery from your own channel or help you with online ordering from your own app or your own website.

AI assessment note: “Today DoorDash Is a business with, you know, five big areas.”

Q How, how are you measuring success? Like, was it, was it from the interest and engagement from, from restaurants or, or was it from people ordering from the platform? Like, how did you know this was sticking?

A Yeah. And you're right. There are three questions, actually, to know whether or not the idea for DoorDash would work. But the first question really was, would consumers care if we made available all restaurants for delivery? Um, you know, in 2013, only about 10 to 15% of restaurants offered their own delivery. And what we looked for really was, how often would consumers order and come back without a discount or some sort of a marketing incentive? The other questions, of course, well, one, will, will restaurants actually want to partner with us in adding incremental sales to their kitchens? And the final question was, would drivers, the dashers, we call them on our platform, would they actually want to partner with us?

AI assessment note: “how often would consumers order and come back without a discount”

Q How do you even start to figure that out?

A Well, you get into the lowest level of details. You have to, so this is, this is why one of the best things that could have happened to our company was that every single person did deliveries and customer support every single day for the first year. And actually we still do this today. We do this, you know, once a month instead of, you know, every day, um, every single person in the company. And so as a result, you become an expert. You learn about different systems. You learn about the nuances of, you know, How difficult is parking versus if the food is in a different aisle from the drinks from a different aisle from the desserts, you learn how to collate those orders. You learn how to build that into the software so that you can scale this across the country.

AI assessment note: “Well, you get into the lowest level of details.”

Q saw what you were doing, and Uber was a giant, a behemoth, and they start a competitor service, Uber Eats. How, how have you managed stress over the years of trying to do a lot of things, of dealing with competitors, of just You know, changing laws in different states. Like, how do you manage all of that and handle the company? What are some of the things you do?

A Yeah. I think one of the principles that helps a lot, at least for me, is just focusing on what I can control. I don't get to control a lot of things, and, and just starting by, you know, almost writing on a list of things of what not to worry about. I can't control what our competitors do, how much, you know, financial resources they have versus us, but I am able to control what products we deliver, and ultimately, you know, I get to control a lot of How we interact and serve audiences and our customers. And I, and I, and I feel like a lot of times when we experience stress, there's this possible feeling of being overwhelmed where everything is lost. Our agency completely goes away. And I think that's, again, a reason why both on the professional, what I do day to day, as well as personal front of trying to find high agency activities where I know I'm still in control. I'm still getting to feel Very satisfied with the majority of hours I spend doing what I do. That's what allows me to keep going.

AI assessment note: “focusing on what I can control... almost writing on a list of things of what not to worry about”

Q Right now you're selling only knives, but now you're thinking of cutting boards and other things, but when is the right time to do it? Tony Hsu, Uh, are you cook? Do you cook at home?

A I do cook. I, uh, I, I don't cook every night, uh, like you do, Guy, that I just learned. That's incredible. That's an, that's an aspirational feat for me to do it every night. But, okay, so, uh, it's a tough question, and, uh, you know, first, congrats on everything. I mean, it sounds like it's an incredible success, and I'm gonna learn a lot more now also about Portland. I didn't know it was called Knifetown, USA. You know, the first, the first part of what I would think through is do I have the management bandwidth? Do I have the talent on my team to do it? What I've tended to find, um, with projects, um, at any company, no matter how much resources or capital you have, um, what tends to be the rate limiter is do you have a great single leader lead? It doesn't have to, you know, manage a large team or anything who can actually be responsible end to end for the next Thing. In this case, cutting boards. If you have that person, it doesn't have to be your co-founder, but it could be someone else who you believe, um, you mentioned you had a small team who can do that end to end. I think that's a positive. The second question I would ask is do you have the financial runway to be able to manage, you know, obviously, uh, what I would imagine would require some upfront investment. Whether it's in materials, or team, or distribution later on, um, as, as you think about selling cuttin…

AI assessment note: “the first part of what I would think through is do I have the management bandwidth?”

Q Given that you operate across states, are you seeing huge differences in business depending on the state? Like for example, you know, in New York where the crisis has been, um, you know, quite acute, um, did, did you see just sort of delivery numbers surge in New York compared with California, for example, where the numbers of COVID- Cases is far lower.

A So most states took a similar shape. Uh, there were certainly a couple of exceptions, but most states took, took similar shape. And a lot of it have to do with, you know, what announcements were made by state governments or city officials and, and when those announcements were made. So for instance, right after the shelter in place announcements were made in, in, in a city, the first thing that would happen is, you know, consumers would actually go and stockpile on groceries. And I think this is where you may have read about some of the stories of, Um, stores running out of toilet paper, you know, convenience items and things like this. After about a couple of weeks, that's when you started seeing consumer behavior resume to some of what was happening before the pandemic, which was seeking convenience and not necessarily cooking every meal. And they would actually start ordering from restaurants again. And most states and cities took that shape. New York was a bit of an exception to that in the sense that New York has a lot of people who commute into the city, typically, um, when all the businesses are open to work during the day, and then they may leave after hours as the workday closes. Because of the shelter in place announcements, New York just saw a reduction in the number of people that were there, and so the delivery volume there was more significantly impacted.

AI assessment note: “most states took a similar shape. Uh, there were certainly a couple of exceptions”

Q Are you finding restaurants that are pivoting right now that are actually saying, you know what, we just gotta focus on just getting food out the door and not worry about presentation so much?

A Restaurants that were doing, that are doing well in surviving this pandemic, um, were ones that recognized that even prior to this pandemic, it wasn't that, you know, every meal occasion was happening inside their walls, so they were starting to invest, or they had already invested in, you know, their, their takeout or their off-premise business, and those businesses are actually doing pretty well, and, and, and they're able to pay off their rents, Um, you know, some are starting to think about, uh, reopening their stores, especially given, you know, some of the progress we've made on the health front. The second point I would make is there are businesses that are starting to change how they do business. I see Michelin star restaurants changing their menus, which used to be exclusively for in-store, very high end, Um, kinds of experiences, and they're making now more approachable, accessible family meals that can, ah, really service both comfort and as a way for them Um, to keep their business up and running during this period of time.

AI assessment note: “I see Michelin star restaurants changing their menus, which used to be exclusively for in-store”

Q How much of your success do you attribute to skill and hard work and intelligence, and how much of, of what is happening is, do you think is because of luck?

A There's a lot of luck, um, involved, um, in, in shaping a lot of the circumstances for me. Um, it, it's, it's absolutely a combination, that's the short answer, but, but when I think back in my life, I've come a long way on the shoulders of a lot of great people. Who I was gonna meet in school, to, um, things I studied in the past that somehow have magically made its way back into my life today. Um, to people in Silicon Valley who, you know, before even having a, you know, a business partnership with, with me or the company who have more than volunteered the time to help me, um, there's been a lot of fortunate circumstances for me. On the flip side, of course, there's a lot of hard work, and I think, you know, the hard work, um, And skill is, is really not of one person, and I think that's the thing that sometimes people forget. I think we live in a world where it's easy to idolize this, the stars. Um, to me, the real heroes are, are my teammates, and the people whose collective hours, skills, hard work, and drive Or what has allowed me to be successful today?

AI assessment note: “There's a lot of luck... it's absolutely a combination, that's the short answer”

Q And at what point did you and your co-founder say, This is our business. We're gonna, like, what, what, what information did you get or did you gather that convinced you this, this was gonna be the thing we're gonna try to do?

A Yeah, there, there wasn't, there wasn't that moment. We were doing such little volume. We were, we were delivering maybe five to 10 orders a day, half of whom from our friends, and so it, certainly from the data, it, it would have been too far a jump. Um, to say there's a business here. But, you know, I, I think two things kept us going. One was just enjoying working with one another, and, and then second was, we kept getting positive answers to the questions we were asking. You know, is this something that consumers wanted? Is this something that restaurants were willing to pay for? Is this something that drivers were willing to, to, to partner with? And so, it was more incremental. And, and, and there wasn't these, you know, step function jumps per se. We were a very small service still at the time.

AI assessment note: “there wasn't that moment. We were doing such little volume.”

Q Tony, what do you say to people who are skipping tips right now? I mean, I don't want to shame anybody and it's, it's tough time and people are tight, you know, right now times are tough for so many people, but what do you think about somebody who doesn't tip?

A Well, I recommend people to give when they can. And, you know, what I would say is tips certainly help, um, on, at the same time, I'm seeing a lot of, uh, you know, other ways of giving as well in addition, um, you know, to tips. For example, I'm, Thank you notes that are being drawn out in chalk on the garage driveway or posters in the window. And I know it's, it's different from tips, but I think these small moments of positivity, they go a long way. I see this also in the restaurant community where restaurant owners are not just trying to bring positivity in the form of say, donating meals to those who really need them. They're doing that also with the dashers, but if and when you can, and I recognize it's a very hard time for everybody and we're all in this together. If you can give a little, I'd recommend that you do.

AI assessment note: “Well, I recommend people to give when they can.”

Q I'm curious, like, when you think about this, uh, Disaggregated world we live in, right? Can this industry, the logistics industry, support DoorDash, Grubhub, Uber Eats, Postmates, on and on and on? Do you think they can all coexist in that world, or do you think there's ultimately going to have to be one or two winners?

A So, it is a very giant space, as you mentioned. Um, there are, when we were doing our research starting the company five years ago, there were 800 plus companies just in third-party logistics. I know we know about the FedEx's and the UPS's, of course, and the Postal Service, but there are 800 plus companies just delivering parcel that we've researched, and I'm sure around the country. Around the country. The offline world is just so much bigger and disaggregated to your point. You know, the second thing I would say is when you look at the, our current industry, the restaurant industry, it is not yet even online. 95% of orders still happen through a phone call or an in-person visit. Only five percent occurs through an internet connection. I know we talk about a lot of these other services, But the fact of the matter is that we are in the very earliest endings. They have a gigantic industry. And we really remember started, this all started because of a want and desire to help local businesses. It's also given DoorDash the clarity to go and get all the details right. Even the ones that don't seem scalable. There's, for example, a cheesecake factory that we deliver from in San Francisco. It's on the sixth floor of a mall of Macy's.

AI assessment note: “the fact of the matter is that we are in the very earliest endings”

Q Tony, are you finding that, that, I mean, I know that on DoorDash, you know, there's healthy options. There's a bunch of, there's a bunch of different categories. Are you guys able to discern any trends? Like are, are you seeing people looking out for more sort of keto focused diets or grass fed? I mean, is there a way for you to even know that?

A Yeah. Well, we look at search terms, um, right. And so we definitely, you know, see search behavior and you're right. I mean, I, I think while there are geographic, uh, differences, I think the, the, the mega or macro trend is still on point to what you're, you're building, which is everyone wants to be healthier. And that's, you know, there's exercise, obviously nutrition and diet is a massive part of it. And so, On DoorDash, um, people do look for these other options. And I think, um, the key is, you know, it's almost like you're building this fire, right? And the most important thing is for that fire to keep burning in the beginning. And it's gonna keep burning if you have the group of passionate people, whether it's, you know, the fitness enthusiasts, the people who are searching for this, it could be the restaurateur. Who really appreciates, um, you know, food from very clean supply chains, and I think as that fire, you know, it keeps going, the way it's gonna keep going is, A, they, they actually love your product, so I think it has to be both authentic, clean, and it tastes great, um, and, you know, will they actually wanna keep coming back to it, talking about it, and then that gives you the right to, you know, build This huge, you know, explosion of a movement, which then allows you to build this platform into, you know, for all farms across the country, the world, per…

AI assessment note: “Well, we look at search terms, um, right. And so we definitely, you know, see search behavior”