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- Unheard Roots of Doordash (PT.2) 🚀
If you read last week’s issue on Doordash, you will remember I left you at a cliffhanger.
(If you didn’t read it, read part 1 so you don’t end up totally confused).
So what was this massive obstacle standing in between them and solving a clear pain point for restaurant owners?
The Obstacle 🏔
Despite knowing restaurant owners would love it if their delivery problem could be solved, none of the 3 college kids had experience in logistics.
And anyone with half an idea of logistics knows how truly complex it is.
But the lack of experience clearly didn’t stop the trio - so what did they do?
Every single person in the group got a job as a delivery driver for FedEx, Dominos, etc.
The goal was to understand logistics and delivery as much as possible before working on the idea of Doordash.
“We weren’t really experts in logistics per se so we had to be students of it and the only way we thought we could be students was by actually doing the work.”
Business Lesson:
Just to interject here - there is an imperative lesson here on the paradox of experience in startups. Those who disrupt industries are rarely people with the most experience in that industry.
This was the exact same lesson with the Spotify story, where two guys with no experience in music disrupted music. It’s the same with Doordash, this time 3 college kids with no experience disrupted delivery & logistics.
“There is something said about that the entrepreneurs that are successful in an industry seldom the people with the best knowledge about it. It’s usually outsiders or people that have somewhat of an insight but aren’t full deep in the weeds of why things are working.”
One Quick Recommendation
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The 20 steps 🛣
“And so when we started doing deliveries, we started noticing that some restaurants are really really fast and efficient and other restaurants take a little bit longer.”
Tony & his partners ended up identifying 20 steps in the process of making deliveries.
All of this newfound knowledge now allowed them to officially start working on the primitive versions of Doordash.
— — — —
Business Lesson: Are you noticing how they’re breaking the business down to its fundamentals? This is the superpower of the Doordash founders, they operate in the lowest level of detail at all times.
“Operating at the lowest level of detail is pretty much trying to find your way to the right problem. And it’s almost never at the surface.”
For getting to the lowest level of detail, the founders of Doordash use the 5 whys formula.
Example:
“We received lots of angry customer emails today”
Why?
“Our website was down”
Why?
“We had faulty code”
Why?
“Because the intern made an accident”
Why?
“Because we didn’t provide training and guidance”
For Doordash, this looked more like:
“Delivery was late”
Why?
“The Dasher picked up the order later”
Why?
“The restaurant took too long”
Why?
“One of the employees called sick”
…
This approach + building an understanding of even the smallest details of delivery by working for FedEx, etc is what made Doordash such a successful company.
Data, according to Tony Xu, never reveals the mechanics behind a problem. You almost always need to go much deeper than the numbers to understand why things are the way they are.
— — — —
Doordash was called something completely different in the early days.
It was paloaltodelivery[dot]com
The very first website of Doordash
Palo Alto Delivery 🛵
The early days were just the founders and a couple of other people who wanted to help out in a small 2 bedroom apartment.
Paloaltodelivery[dot]com, aka Doordash, was just a PDF menus on a website and a phone number in the very early days.
If you look at the screenshot above, you will see the call to action is “Call To Order”.
The founders of Doordash would literally stop whatever they were doing during the day when they got a call to pick up food.
Getting close to death đź’€
Unfortunately, Doordash came very close to dying 3 months into their journey when a major football game at Stanford led to a massive influx of orders.
“There was a big Stanford football game in September and long story short we were late on every single order and no ability to turn off the site. So it was just horrendous.”
Since it was only the small founding team doing orders - a lot of people didn’t end up getting their food or got their food late.
And a lot of people were understandably infuriated.
“Everyone in the company, all twelve of us were delivering and everyone, rightfully so, were furious because of how late we were.”
So the founders had a choice - they could either refund the money to all of the customers which was 40% of all of the money they had in the bank or they could live to survive another day.
Guess what they did? They refunded all of the money.
Tony Xu believed it was better to die in the pursuit of excellence than do live a mediocre existence.
Finding Drivers 🛵
For the first year in a half to two years the founding team did all deliveries.
Eventually, as order volume steadily grew, the founders got on Craigslist to find delivery drivers.
On the consumer end, having access to Stanford was a massive advantage. That is where a majority of early customers of Doordash came from.
Much like Facebook, Doordash grew from a university campus.
And that is it for the Doordash story.
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Andd also feel free to tell me if there is another major startup you want me to cover next.
Till the next time fellas… 👋
(Also this is where I got all of my information from).