DoorDash

“When they interviewed here, ah, like actually in the room right over there, I, my like one question for them was like, will you deliver to my house? Because at the time, when they went through YC, there was no food delivery where I lived, and I get hungry. And…”

“DoorDash, another amazing Y Combinator company, which actually I met the founder at Y Combinator Demo Day just raised five hundred million dollars, and I made that intro to SoftBank.”

“The first one here has 30% after two months and 21% after 20 months. This is pretty good. So you kept a fifth of your users 21 months later, or 20 months later. It's DoorDash. DoorDash have a monthly retention of 20% two years later, a year and a half later.”

“DoorDash, who I guess we always talk about, but you know, they were good at numbers and they understood default alive, default dead, and they understood burn, like very sophisticated. And so even though they were playing, they were flying the plane very close …”

“If you are in an operationally intensive business, you know, a la DoorDash, you better be 10 X better than the people around you at knowing your numbers at steering that plane well.”

“In the example of companies like DoorDash and Instacart, they've reached economies of scale where they're so large now that they've been able to drive their costs further down at this scale And improve their margins, which new entrants are not going to be able…”

“Over the course of the next few weeks, the founders interviewed over 200 small business owners across the Bay Area, and they kept hearing the same issue. Deliveries are painful.”

“DoorDash, at the beginning, they slapped it in one afternoon, and they were actually called Palo Alto delivery, and they took PDFs from menus, And literally put their phone number. That phone number there is actually from one of the founders. And there's, the …”

“But I think if you just look at the facts of the companies we funded, like literally DoorDash or literally Airbnb or any of these folks, they lived and died by their speed of shipping software. And if they, what they did was buy white label software or have so…”

“DoorDash, as a product, was built in one afternoon. Whether you believe it or not, the tech stack was basically Google Drive to upload the menus. HTML, CSS for putting the menus. The phone was Tony's phone.”

“Today's guest, Tony Hsu, who created DoorDash, which now has mid-sixty percent of all food delivery in the United States.”

“Today, DoorDash has over seven million drivers in on the platform. Of these dashers, the drivers on the platform, almost 60% are women.”

“Yeah, we shipped paloaltodelivery.com Under an hour. I don't remember exactly, but maybe 45, 50 minutes, because all it was a static HTML page with eight PDF menus, and these were menus of restaurants in Palo Alto that we frequented often as students. It had a…”

“And there were a couple, there were a few years actually in a row, three years in a row, 2016, 1718, where I continued to struggle to raise capital. And I think this was the part that was quite difficult for us, where you have a company whose product seems to …”

“I mean, the company almost went out of business because you know, we didn't raise a lot of money from Y Combinator with the initial grant, and so we were looking for seed financing, and we were a couple weeks away from going to zero.”

“There were 20,000 maybe restaurants offering delivery at the time, and that's who Incumbents would work with, you know, the Grubhubs or the Seamlesses. They would partner with these restaurants that had their own delivery fleet, and they would, you know, just …”

“Make sure that we can ship no contact delivery or contactless delivery. We ship that product in four or five days.”

“Your Series C was actually a down round.”

“We had done all the deliveries ourselves, and we actually kept that going for about two years straight after, And even to this day every person at DoorDash, myself included, does deliveries every year.”

“Because DoorDash always had superior retention and frequency. Every dollar that we spent would just go a lot farther for us than anyone else.”

“One of the earliest tests we ran was we recruited two groups of drivers. Roughly speaking, 20 drivers who drove for UberX at the time and 20 who deliver for DoorDash. The control, if you will, variable was that they both earned 20 dollars. An hour, each group.…”

“Where in the places outside of city centers, the suburbs, you tended to have a greater percentage of families, which have more mouths to feed. As a result, you tended to have higher baskets. Higher baskets meant larger revenues. You also tended to have easier …”

“We were actually in 2019 preparing, you know, to go public. Obviously, COVID shelved those plans.”

“One was running a national TV campaign where we spent millions of dollars advertising on behalf of the industry, basically saying whether you order on us or any of our peers, just order.”

“I mean, the earliest days, all four of us did all the deliveries.”

“And the other decision, which we were the only platform to do, we cut our commissions by half, which cost us over a hundred million dollars.”

“And we called it a project, I think for the entire first year of the company's life, even after legally incorporating.”

“My co-founders and I looking at what the refund cost would be because we thought the right thing to do would be to refund everybody. But that would take away about 40% of the bank account, which was already quite low. We took maybe 10 seconds to make the decis…”