How to Build the Future: Tony Xu

**Tony Xu** (0:00)
There's no better way to be the expert than just to do the work. You might be surprised at how quickly you get to become the expert. We're here to build a company that will grow and empower every physical business, and grow the GDP of every city if we're successful in doing so. That's not going to happen in one year, two years, five years, ten years. That hopefully can be a forever or an eternal mission. There are moments, whether it's the start of the company or a crisis situation like COVID-19, where it becomes very clear why you're doing what you're doing, or should be very clear to you, why you're doing what you're doing. And when you have that kind of clarity, it makes it a lot easier to make those decisions.

**SPEAKER_2** (0:45)
Welcome back to another episode of How to Build the Future. Today's guest, Tony Xu, who created DoorDash, which now has mid 60% of all food delivery in the United States. Tony, welcome. Thank you. You actually mentioned you had two or three other ideas. How did you arrive on this particular one, and what disqualified the other ones?

**Tony Xu** (1:11)
There were two important things. One was that if we decided that we enjoyed working together, we're going to keep going. And two was whether or not we actually liked the idea of the project and enough to keep going. And we called it a project, I think, for the entire first year of the company's life, even after legally incorporating. So one of the projects, for example, that we worked on that met one of the criteria but didn't meet the other was a tablet app that would sit at the counter, so at the point of sale register, and would ask customers while they were paying for whatever items they were purchasing, where they had heard about this retailer or this restaurant. And it was just a very simple survey and reporting app that basically helped merchants figure out the effectiveness of their marketing spend.
We loved working together. We didn't love working on that particular project, and that turned out to be something that we canceled. When it came to DoorDash, the initial idea really came when we visited a macaroon store owner. Our question that we tended to ask business owners was, can we follow you around for a day? So we'll go and pack boxes with you, do your accounting with you, make salads with you.

**SPEAKER_2** (2:38)
You went undercover.

**Tony Xu** (2:39)
Well, we wanted to actually feel what it was like, their lived experience versus just asking a bunch of survey questions. I love it. Sometimes it's very, very hard for any customer to tell you exactly what is inside their brain when you ask them what problems they have. And so we wanted to feel and maybe try to figure it out ourselves. And it was toward the end of the time we spent with the store manager that she had showed us a booklet of orders she had turned down. All of them were delivery orders. That was the common thread. And it just made no sense to us. We said, you're a one person shop. This is a big deal. This is a thick booklet of orders that probably is very meaningful to you. We don't understand why you're not pursuing it. And so we really just unraveled that threat. As we kept studying this problem, we just found more and more interesting threads of where it would go. Yes, certainly we could have done delivery just for this macaroon store owner. But then you can imagine you could do it for all bakeries, all types of restaurants, all types of retailers. And we started hearing the need from so many different merchants that we knew there was something there. What we didn't know was whether or not consumers cared and whether or not there could be a driver workforce that we could partner with. And so those turned out to be the key things we worked on at YC.

**SPEAKER_2** (4:02)
And you also met your co-founders partially through Stanford, was it?

**Tony Xu** (4:06)
Yeah, the GSB was an interesting time for me. I mean, I applied on the recommendation of one of my mentors at eBay at the time, who was the CEO, John Donahoe at the time. And he thought that would be great for my personal development. So that was really that was kind of the thesis. And so, I didn't go into Stanford, in other words, trying to think about starting a company or even looking for co-founders. That was very fortuitous. Meeting Andy Stanley and Evan, Evan turned out to be a roommate, and that was just purely from a social circumstance. Andy and Stanley were roommates at the undergrad. We happened to meet, we worked on different projects together. It wasn't intended to necessarily over time become a company or anything like this, but that's really how we got started.