Tony Xu, co-founder of DoorDash, explains the importance of product simplicity as a startup founder

TL;DR

Product simplicity matters because DoorDash can give consumers an easy, low-friction experience while its technology handles complicated logistics behind the scenes. Co-founder Tony Xu says the company focuses on software, leaves food preparation to restaurants, makes work easier for Dashers, and uses systems that learn from delivery decisions over time. Read on to see how that approach applies to difficult routes, flat fees, and variable delivery payments.

Transcript

no I think you have to focus on what you're good at I think companies are built inside out not by analogy or by looking at what's hot and and and when what's working I you know for us we're a bunch of math geeks who started the company right we don't know anything about making food right and in fact you know our idea is you know let each side of th... Read More

Key Insights

• 😋 DoorDash believes in focusing on its core strength of technology rather than trying to expand into areas it has little expertise in, such as food preparation.
• 💦 The company prioritizes reducing friction in the ordering process for customers and making it as easy as possible for dashers to work.
• 🚚 DoorDash is committed to offering a wide selection of restaurants and making delivery accessible to all customers, even in challenging areas.
• 🥡 Variable payments based on distance or time taken for delivery could be a possibility in the future.
• 💦 DoorDash acknowledges the complexities of certain deliveries and is constantly working to optimize their systems and make smart decisions to improve efficiency.
• 🐕‍🦺 The company utilizes software to make intelligent decisions, learn from them, and improve their overall delivery service.
• 👤 DoorDash aims to offer a simple and user-friendly product for consumers while handling the complications behind the scenes.

Questions & Answers

Q: Why does DoorDash co-founder Tony Xu believe product simplicity is important for a startup?

Tony Xu says a company should offer consumers a simple, easy-to-understand, low-friction product while handling complications behind the scenes. For DoorDash, that means presenting a straightforward ordering experience and using technology to solve the difficult logistics problems required to make the system work.

Q: What should startup founders focus on when deciding what their company should build?

Xu says founders should focus on what they are good at rather than copying what is popular or working elsewhere. He describes companies as being built “inside out,” based on their own strengths.

Q: Why does DoorDash focus on software instead of preparing food?

Xu describes DoorDash’s founders as math-oriented people who know how to write software but do not know how to make food. DoorDash therefore lets restaurant operators handle food preparation while the company concentrates on technology and logistics.

Q: How does DoorDash reduce friction for consumers and Dashers?

DoorDash tries to remove as much friction as possible from the consumer ordering process. It also aims to make working through the platform as easy as possible for Dashers.

Q: How does DoorDash use software to improve deliveries?

Much of DoorDash’s software is not visible to consumers. It is used to make decisions, learn from those decisions, and train the company’s systems over time so DoorDash can provide logistics capabilities to merchants.

Q: Does DoorDash deliver to difficult locations such as the hills of Bel Air?

Yes, Xu says DoorDash still makes deliveries to places such as Bel Air, although not as easily as to locations like Westwood. The company accepts that some deliveries are more difficult because it wants to offer broad restaurant selection and make delivery accessible to everyone.

Q: Does DoorDash charge consumers more for long-distance deliveries?

When asked whether DoorDash charged more for certain long hauls, Xu answered no. He characterized the consumer-facing product as having an easy-to-understand flat fee while DoorDash manages the underlying complexity.

Q: Can DoorDash vary Dasher payments for longer or more difficult deliveries?

Xu says delivery payments can be variable. That could allow DoorDash to make different payment choices for a longer-distance delivery while keeping the product simple for the consumer.

Summary & Key Takeaways

• DoorDash focuses on what they excel at, which is technology, and lets restaurant owners handle the food preparation.

• The company aims to reduce friction in the ordering process for consumers and make it easy for dashers to work.

• DoorDash strives to offer a wide selection of restaurants and accessible delivery to all customers but acknowledges the challenges of certain deliveries.