DoorDash: Foundations of a Category-Defining Brand
Highlights from ✨Hot Deal Time Machine✨⏳ -- On Clubhouse
Below are highlights from my recent Clubhouse episode featuring Saar Gur, GP at CRV, on his early investment in DoorDash
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☎️ The Payoff: A fortuitous reference call
When diligencing a potential investment, customer references are a standard part of any VCs process. For many, those references might be more confirmatory in nature. However, Gur came across DoorDash because he kept an open mind and open ears through his reference calls. In fact, he was actually diligencing a different food delivery company, Fluc, when he made a fortuitous call to Oren’s Hummus, a restaurant in Palo Alto. Oren’s was a customer of Fluc and the manager, Misty, shared that she had a good experience using Fluc for delivery. However she went on to share that she also used two other services, one of which is DoorDash. She mentioned that DoorDash seemed to really understand her restaurant’s needs and the nuances of interacting with customers. From there, Gur tracked DoorDash down and the rest is history.
💡 The Differentiator: Nailing “original product thought”
Gur explained that as a product oriented investor, he often looks for founders who have what he calls “original product thought.” By this, he means a founder who understands a problem so deeply that they approach and solve that problem in a novel way. In the case of DoorDash, CEO Tony Xu, demonstrated a deep understanding of the need from the view of the restaurant owner. XU pointed to Oren’s Hummus as an ideal customer: a restaurant with limited front of house seating that was always packed, but had excess kitchen capacity. The solution? DoorDash would put an iPad directly in the kitchen so orders would be sent directly to the kitchen, rather than routing through the front of house staff and interfering with an already overburdened operation. That insight at the time, while subtle, showed an understanding of what it meant to run a restaurant and how DoorDash could be complimentary without changing a lot of operations - a true example of the “original product thought” that Gur was seeking.
⛏ The Hack: Follow the demand
In the early days of launching a marketplace, it requires both unscalable tactics, as well as hacks to jumpstart growth. For DoorDash, one of the main insights was to surf off of the demand of existing restaurants. Rather than picking off the no-name restaurants and trying to promote them, a route that a number of other companies took, DoorDash focused on the most popular restaurants first. An example that Gur gave was Pizzeria Delfina in San Francisco, a well known brand that had droves of customers frequently asking if they delivered. When they could, the DoorDash team would sign these companies up directly on the platform. In other cases, they would just add the menus to DoorDash to allow consumers to order, and just start showing up at the restaurant with Dashers as a hack. Eventually the restaurant owners would say “who are these people in red t-shirts picking up all these orders?” And soon after that would lead to the conversation of who is DoorDash and how they could be helpful to the business.
📊 The Edge: Metrics-orientation from Day 1
Even when the business was barely off the ground, the DoorDash team was measuring all of the metrics for a local real-time delivery company: average delivery time, # of errors, # of customer support issues and more. Gur explained that many of the best companies have deep fluency in these types of metrics at a very early stage. He shared that the best founders are able to sell the dream, paint a vision and recruit great talent, but they tend to also be very quantitative with an ability to rattle off the numbers and know exactly what they're driving towards in terms of the unit economics and efficiency of the business. Xu and team uniquely had both of those and the way in which they talked about the business just made it clear this was the team Gur had been looking for.
🏀 The Culture: Play like a basketball team
As Gur pointed out, there are a million reasons to not work at a start-up, especially one that is growing rapidly and enduring constant growing pains. However, one of the secrets to DoorDash’s success in managing through hyper-growth was the culture that Xu built and the talent that he continued to recruit. XU grew-up playing basketball and he regularly instilled those team values within the company: putting in the work, moving as one team, and no excuses. The result was a winning culture, achieved through hard work and team commitment. That culture shows today - the team continues to go to great lengths to solve problems for restaurants and consumers and of the first 100 employees, the majority are still at the company.
👉🏼 ✨Hot Deal Time Machine✨⏳ is a 30-minute Clubhouse show where we travel back in time to the early stages of some of today’s hottest deals. Hear from founders and investors on the original pitch and thesis…and how things actually played out