Advice Line with Tony Xu of Doordash

**Guy Raz** (0:06)
Hello, and welcome to the Advice Line on How I Built This Lab. I'm Guy Raz. This is the place where we help try to solve your business challenges. Each week, I'm joined by a legendary founder, a former guest on the show, who will help me try to help you. And if you're building something and you need advice, give us a call, and you just might be the next guest on the show. Our number is 1-800-433-1298. Send us a one-minute message that tells us about your business and the issues or questions that you'd like help with. And you can also send us a voice memo at hivt at id.wondery.com. And make sure to tell us how to reach you. And also, don't forget to sign up for my newsletter. It's full of insights and ideas from some of the world's greatest entrepreneurs. You can sign up for free at guyraz.com or on Substack. And we'll put all of this info in the podcast description. All right, let's get to it. Joining me this week is Tony Xu, the co-founder and CEO of DoorDash. Tony, welcome back to the show.

**Tony Xu** (1:02)
It's good to be back.

**Guy Raz** (1:04)
You were first on the show way back in 2018, to of course to tell us the origin story of DoorDash. And for those of you who missed it, we will put a link to it in the show notes. Super awesome episode. It's about how Tony worked at the same restaurant where his mom worked when he was a kid, because they immigrated to the US when you were like four. You changed your name to Tony because you loved the show Who's the Boss? And it's star Tony Danza, which is such a funny star. Love that story. And of course, how you came up with the idea for a food delivery business while you were at Stanford at the business school and an idea that I should mention was met with considerable amount of skepticism at the time, right?

**Tony Xu** (1:43)
Yeah, absolutely.

**Guy Raz** (1:45)
And in part because people probably thought, well, the logistics and all the costs, associated costs, the margins are going to be terrible. I think when you were on the show in 2018, DoorDash had done something like 100 million deliveries at that point. And I think as of last year, I read, you processed over two and a half billion orders. Is that right?

**Tony Xu** (2:05)
Yeah, that magnitude of change is hard to comprehend sometimes. But yes, a lot has changed in a short period of time.

**Guy Raz** (2:12)
I mean, it's amazing. DoorDash is now the largest food delivery service in the world. Tony, I know that today, obviously, you guys are continuing to build DoorDash into an even bigger, broader platform for 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, which I think is still the process. Can you tell us a little bit more about some of the things going on with DoorDash now? What is the vision for expanding the platform?

**Tony Xu** (2:46)
Sure. 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 well over 99% of what we did. Today, DoorDash is a business with 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 a couple acquisitions that we've announced. We now operate in over 35 countries. We have a B2B 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.

**Guy Raz** (3:41)
That's amazing. One of the things that I was always wondering about, right? Because when you started it out, it was called Palo Alto Delivery Service, which doesn't flow off the tongue quite as easily as DoorDash. It was, I think, just like eight PDF menus and a Google voice number that went to you or one of your founders, co-founders.

**Tony Xu** (3:58)
Yes.

**Guy Raz** (4:00)
How were you measuring success? Was it from the interest and engagement from restaurants or was it from people ordering from the platform? How did you know this was sticking?

**Tony Xu** (4:10)
Yeah. You're right. There are three questions actually to know whether or not the idea for DoorDash would work. The first question really was would consumers care if we made available all restaurants for delivery? In 2013, only about 10 to 15 percent of restaurants offered their own delivery. 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 restaurants actually want to partner with us in adding incremental sales to their kitchens? The final question was, would drivers, the dashers, we call them on our platform, would they actually want to partner with us?