Technology
Live from the scene of its blockbuster IPO, we recount the crazy, roller coaster journey of this "Palo Alto delivery company". From Sand Hill darling during their Series A and B fundraises to all but left-for-dead during the great unicorn massacre of 2015/16, DoorDash has clawed their way back from the brink and emerged as America's dominant meal delivery service, and its only unit-economic positive standalone logistics player. Is this the dawn of the next great Amazon-like story, or is the company simply benefiting from temporary tailwinds due to the pandemic? As always, we dive DEEP to find out. If you want more more Acquired and the tools + resources to become the best founder, operator or investor you can be, join our LP Program for access to our LP Show, the LP community on Slack and Zoom, and our live Book Club discussions with top authors. Join here at: https://acquired.fm/lp/ Sponsors: Thanks to Tiny for being our presenting sponsor for all of Acquired Season 7. Tiny is building the "Berkshire Hathaway of the internet" — if you own a wonderful internet business that you want to sell, or know someone who does, you should get in touch with them. Unlike traditional buyers, they commit to quick, simple diligence, a 30-day or less process, and will leave your business to do its thing for the long term. You can learn more about Tiny here: http://tinycapital.com Thank you as well to Bamboo Growth and to Perkins Coie. You can learn more about them at: https://growwithbamboo.com https://www.perkinscoie.com/ Playbook Themes from this Episode: (also available on our website at https://www.acquired.fm/episodes/doordash ) 1. Sometimes winner-take-all markets DO tip. The end-state that Uber (and its global peers) spent the past decade chasing — that eventually it would outrun its competitors, tip entire markets in their favor, add multiple product lines and turn massively cashflow positive — has thus far proved elusive, leading many to believe that any such undertaking is a false dream. But, since 2018 China's Meituan appears to be doing just that, all while operating in an even more competitive environment than Uber. DoorDash may now be on a similar trajectory in the US. That said, it's almost impossible to predict in advance how much time and capital it will take to get there, let alone any one company's odds of success. DoorDash benefitted immensely from their competitors' relative difficulties accessing capital post-2016, and was willing to sacrifice enormous dilution to outlast them. If you're going to play the winner-take-all game, you need to be willing to go all-in when others blink. 2. If you're going to fly low to the ground, you also need to operate at the lowest level of detail. Flying low to the ground (i.e., sacrificing higher margins in order to share more value back to your customers and suppliers) is a great recipe for success in highly competitive markets like e-commerce and on-demand services. However when you do so, you need to be maniacal about squeezing every last drop of efficiency out of your platform: every 1% improvement in margins could mean a 20%, 30% or even 50% profitability increase and the difference between life (for you) and death (for your competitors). DoorDash clearly gets this and has embedded this ethos in everything they do at the company. 3. Focus on what you can control. DoorDash had the capital markets turn against them HARD early on in the company's life. It would have been easy to lose focus, sell or give up, as did many of their competitors. To Tony and the entire company's credit, they kept moving forward and made decisions each step of the way that kept the company alive — even when those decisions came at a high cost. As a result they outlasted nearly all competition and were in a position to IPO at one of the highest market caps of all-time, all as an only 7 year old company. 4. "Why now" matters. DoorDash had one of the best "why now" answers of all-time: mass-market smartphone adoption (not just high-end) made 3 things true that were never possible before: 1. average consumers could order online conveniently, 2. couriers could plug into the network via their own devices, and 3. restaurants (most of whom didn't have wifi or desk staff) could accept orders online. Before 2013 a business like this would simply have been impossible to build. Carve Outs: David: Hades on the Nintendo Switch: https://www.nintendo.com/games/detail/hades-switch/ Ben: Watchmen on HBO: https://www.hbo.com/watchmen Succession on HBO: https://www.hbo.com/succession Palm Springs: https://www.imdb.com/title/tt9484998/ Sources: https://en.wikipedia.org/wiki/DoorDash https://startupclass.samaltman.com/courses/lec08/ https://techcrunch.com/2013/09/30/door-dash-raises-2-4m/ https://medium.com/@DoorDash/the-doordash-story-b370c2bb1e5f https://vator.tv/news/2019-01-04-when-doordash-was-young-the-early-years https://medium.com/@DoorDash/the-red-shirts-are-in-boston-838b0ddf63de https://medium.com/@DoorDash/doordash-raises-40m-led-by-kleiner-perkins-caufield-byers-9be34d3480c1 https://medium.com/@DoorDash/with-doordash-the-colonel-now-delivers-609fe6e8d263 https://www.tmz.com/2015/11/11/in-n-out-lawsuit/ https://www.chicagotribune.com/business/ct-biz-doordash-restaurant-food-delivery-lawsuit-20180109-story.html https://medium.com/@DoorDash/2015-the-year-in-doordash-delivery-b40bd22738b9 https://medium.com/@DoorDash/127-million-more-ways-to-move-doordash-forward-e22d86739a56 https://www.wsj.com/articles/food-delivery-startup-doordash-is-raising-more-than-110-million-1455639655 https://www.wsj.com/articles/BL-DGB-44622 https://fortune.com/2018/08/16/doordash-raises-250m-at-4b-valuation/ https://qz.com/1549084/doordash-overtook-uber-eats-in-us-online-food-delivery-second-measure-finds/ https://fortune.com/2019/03/11/doordash-tops-grubhub-on-demand-food/ https://www.inquirer.com/news/virus-doordash-grubhand-profits-competition-sales-20200427.html https://www.theverge.com/2020/6/10/21287128/grubhub-just-eat-takeaway-merger-uber-deal-antitrust https://themargins.substack.com/p/doordash-and-pizza-arbitrage https://www.meritechcapital.com/blog/doordash-ipo-s-1-breakdown https://www.firehose.vc/p/firehose-181-dashing-to-ipo- https://medium.com/@DoorDash/live-más-on-demand-doordash-taco-bell-is-here-e94956306f9e https://blog.doordash.com/fueling-the-last-mile-3ae0a6b45ea0 https://www.wsj.com/articles/airbnb-doordash-aim-for-higher-than-expected-valuations-ahead-of-debuts-11606689243 https://www.youtube.com/watch?v=g9KRJEAoqQ8 https://www.youtube.com/watch?v=VNfipjK3Gro https://www.sec.gov/Archives/edgar/data/1792789/000119312520292381/d752207ds1.htm https://thegeneralist.substack.com/p/doordash-the-value-of-speed https://www.linkedin.com/in/evanmoore/ https://www.linkedin.com/in/xutony/ https://www.linkedin.com/in/stanleytang/ https://www.linkedin.com/in/fangsterr/ https://medium.com/@DoorDash/doordash-raises-17-3-million-from-sequoia-capital-dc0d7aca1012 https://podcasts.google.com/feed/aHR0cHM6Ly9mZWVkcy5ucHIub3JnLzUxMDMxMy9wb2RjYXN0LnhtbA/episode/MTc1NzVjMWQtYTFjNy00ZWJiLThmZTctYWE0MDc2NDFlYjg3 https://www.wsj.com/articles/doordash-poised-to-tap-torrid-ipo-market-11607442406 https://www.crunchbase.com/organization/postmates/company_financials https://blog.doordash.com/accelerating-our-unprecedented-growth-e5c9eb343ce8 https://nextbn.ggvc.com/opinions/meituan-dianpings-path-towards-profitability/ https://www.meritechcapital.com/blog/doordash-ipo-s-1-breakdown https://tanay.substack.com/p/doordash-and-profitable-food-delivery https://www.firehose.vc/p/firehose-181-dashing-to-ipo- https://themargins.substack.com/p/doordash-and-societal-arbitrage https://twitter.com/micapital2/status/1328491576109068289 https://twitter.com/Jer_Diamond/status/1329187739762184192 https://medium.com/@JeremyDiamond/feeding-the-rebels-6d748b8cfc58 https://thegeneralist.substack.com/p/doordash-the-value-of-speed https://www.ft.com/content/53e32708-59ea-11ea-a528-dd0f971febbc https://twitter.com/michaelxbloch/status/1335608288008941570 https://www.wsj.com/video/series/in-the-elevator-with/in-the-elevator-with-the-ceo-shaking-up-the-bra-industry/2BA23DB1-114C-489B-BA1A-A7346DE99136 https://www.vox.com/2019/1/9/18174556/doordash-tony-xu-christopher-payne-food-delivery-shopping-recode-decode-kara-swisher-podcast https://theflywheel.substack.com/p/doordash-flywheel-teardown https://www.wsj.com/articles/doordash-ipo-filing-shows-a-profitable-quarter-11605276373