Lecture 8 - How to Get Started, Doing Things that Don't Scale, Press

1. STStanley Tang0:00

   Yeah. Thanks for having me, Sam. Um, I'm Stanley. I'm the founder of Doordash, and it's, it's really amazing to be here because it wasn't actually that long ago ago where I sat in, in your seats. Um, I was class of 2014, um, graduated in CS, as well as my co-founder, Andy. And, uh, for those of you who don't know what Doordash is, we're building an on-demand delivery network for local cities. And I want to start off with this photo at, that I took just a few months ago, and I think it... This was the, the night when we just raised our series A, and I took this photo as I was, um, walking back to where I lived. I actually lived in Roble at the time on campus. And, um, I took this photo because I realized just how ridiculous the combinations of things I was holding in my hand at the time. You know, I was holding my CS247 homework, um, and then I had a, my tax forms since it, it was April and I had to fill out taxes, and then also that yellow speeding ticket, and then b- right below that was the, was a $15 million piece of paper I just signed, uh, from Sequoia. And that kind of summarizes just how ridiculous our, our journey has been, you know, starting at Stanford, doing this while I was at Stanford, and then transitioning this into an actual startup, and I want to share that story with you today. Um, it all began two years ago, actually, in a Macaron store. Um, it was my junior year at Stanford. This was fall quarter, and at the time, I was really passionate about, you know, how do you build technology for small business owners? And I sat down with Chloe, the owner of, you know, Chantel Guillon, um, a Macaron store in Palo Alto at the time, just interviewing her, you know, trying to get feedback on this, on this product prototype we've been working on, and also just learning about, you know, what her problems were in general. And it was during this meeting when Chloe first brought up this problem of, of delivery. You know, she... I remember she took out this really, really thick booklet, and she showed me, um, pages and pages of delivery orders, and a lot of these orders she had to turn down because there's no way she could have fulfilled them. You know, she had no drivers, and she was the one who ended up having to personally deliver all these orders. And, and that was a, a very interesting moment for us. And, and then we... Throughout the next, over the next course of, over the course of the next few weeks, we talked to, you know, around another 150 to 200 small business owners, and when we brought up this idea of delivery, they kept, you know, they kept, you know, agreeing with us, saying, "Yeah, this is, this is a really big problem for us. You know, we don't have, you know, delivery infrastructure. Um, it's such a huge pain for us. There's, there's not any good solutions out there." And which, which led us to wonder, you know, delivery is such a common thing, you know, such a obvious thing. Why hasn't anyone solved this before, right? Like, we, we must be missing something here. So we thought maybe, maybe 'cause people have tried this in the past, right, but they failed because there wasn't consumer demand for this. So we thought, okay, how can we test this hypothesis? Um, you know, we were just a bunch of college kids at the time. You know, we didn't own trucks or delivery infrastructures or, or anything like that, right? We c- we, you can't just, we can't just spin up a delivery company overnight. So how can we test this assumption we had? So we decided to create a simple experiment, um, with restaurant delivery. We spent about an afternoon just putting together a really quick landing page, and when I went on the internet, I found some PDF menus of, you know, restaurants in Palo Alto, um, stuck it up there, and then had a phone number at the bottom a- a- which was our personal cell phone number actually. And, and that was it. We, we, we put up the landing page. We called it paloaltodelivery.com, and this is actually what it looked like. Um, you know, super, super, you know, simple, ugly. Like, honestly, we, we weren't really expecting anything. We just launched it, and all we wanted to see was, um, you know, would we get phone calls from this? And if we got enough phone calls, then, then maybe this was, this delivery idea was something worth pursuing. So we put it up there. We weren't really expecting anything, and we were, we're driving back home, and all of a sudden we got a, got a phone call. You know, someone called. They wanted to order Thai food, and we're like, "Oh, wow, this is, this is a real order." Um, like, you know, we have to do something about it, right? So-

2. SPSpeaker4:41

   [laughs]

3. STStanley Tang4:42

   [laughs] So we, we're in our cars and, and, um, we're, we're like, okay, like we're, we're not doing anything right now. Uh, might as well just, let's just swing by, you know, Siam Royal, pick up some pad thai, and, and let's, let's deliver it to this person and, and let, let's try to learn how this whole delivery thing works. And, and we did. We delivered to this guy in, up in Alpine Road, I remember. Um, he, he told us he was a... I was asking him, "Oh, how did you hear about us?" You know? "What, what, what do you do?" He told us he was a, he was a scholar, and then he handed me his business card, and it said he was the author of a book called Weed the People, and that was like our first ever delivery, right? It was [laughs] he, it was like the best deli- first delivery slash worst delivery you could have asked for. Um, we, we couldn't make this stuff up and, and, and yeah, and then the next day we got, you know, two more phone calls. The day after that we got five, and then it became seven, and then became 10, and then soon we started gaining traction on campus with paloaltodelivery.com which was, which was, um, which was pretty crazy because think about it, right? This was a, a landing page. Um, you had to look up PDF menus to place your order, and then have to call in. Um, this isn't exactly the most professional looking site, yet people were still... We ste- we kept getting phone calls. We kept getting orders, and, and that's kind of when we, when we knew we were onto something. Um, when people are willingLike, we knew we found a s- need people wanted when people are willing to put up with all this. So I think another key point, um, to remember is that we launched this in about an hour, right? Like, we didn't spend, you know... We, we didn't have any drivers. We didn't have any algorithms. Uh, we didn't spend, you know... We didn't have a back end. We didn't spend six months building, like, a fancy dispatch system, and we didn't have any of that. We just launched, um, because at the beginning, none of that is necessary, right? At the beginning, it's all about testing your idea, trying to get this thing off the ground, and figuring out whether this was something people even wanted, and it's okay to, to hack things together at the beginning. Um, at YC there's a mantra we, uh, we like to talk about, is doing things that don't scale. So at the beginning, we were the delivery drivers. Um, you know, we would, you know, go to class, and then after class, we would go, you know, deliver food. Uh, we were the, you know, customer support. Like, I sometimes had to take phone calls during lecture. Uh, we, we had to, we, we spent afternoons just going down University Avenue passing out flyers about, trying to promote Doordash. Um, I mean, we didn't have any dispatch system, so what we had to do was, you know, we used Square to charge all of our customers. Uh, we used Google Docs to keep track of our orders. Um, we, we used Apple's Find My Friends to keep track of where our, all our, our drivers were. You know, s- stuff like that. Um, just figuring out, like, what's... Just hacking together solutions, just trying to get this thing off the ground. Um, in fact, at one point we were growing so fast that Square actually shut our account down because we were under suspicion of, for money laundering.

4. SPSpeaker7:55

   [laughs]

5. STStanley Tang7:55

   Um, I mean, think about it. We're getting small chunks of, like, 15, $20 orders coming in at a rapid pace.

6. SPSpeaker8:01

   [laughs]

7. STStanley Tang8:02

   Um, it was... Yeah, and luckily my co-founder Tony worked at Square, so he just emailed s-

8. SPSpeaker8:07

   [laughs]

9. STStanley Tang8:07

   ... some buddies there and, uh-

10. SPSpeaker8:10

    [laughs]

11. STStanley Tang8:10

    ... everything was solved.

12. SPSpeaker8:12

    [laughs]

13. STStanley Tang8:13

    Yeah, and, um, another thing about doing things that don't scale is that it also allows you to become an expert in your business, right? Like, driving helped us understand how the whole delivery process worked. You know, we used that as, as an opportunity to talk to our customers, talk to our restaurants. Um, we did dispatching, which helped us figure out, you know, how... We manually dispatched every driver s- and that helped us figure out, you know, what our driver assignment algorithm should look like. Um, we did customer support ourselves, you know, getting real-time feedback from, from our customers. I remember, you know, for the first few months when we got started, we would manually email every single one of our new customers, um, and at the end of every night, and just asking them, "Oh, how was your first delivery? How did you hear about us?" And, and we would personalize all these emails, right? Like, if I see someone order chicken skewers from Orange Hummus, I would say, "Oh," like, "I love Orange Hummus." Um, you know, "How, how, how were your chicken skewers?" Um, "How did, how did your first delivery went?" You know, just feedback like that was, was really valuable, and our customers really, really appreciated that. Um, and, and I remember, um, one time, this was during YC, we were at a, we just came out of a meeting with one, one of our restaurant partners, and, you know, we, we wanted, we heard about this ice cream store that just opened up, you know, on University Avenue called Cream, and we wanted to go try it out. And then all of a sudden, our co-founder back at our, you know, office/house texted us saying, "Oh, we need drivers on the road. We, we got a huge spike in, in demand." So we debated for maybe, you know, 10 seconds, like, "Should we go get ice cream or should we go, go deliver?" Um, obviously we went and delivered, but that kind of became our motivation on, you know, scaling, right? Like, if, if we can scale, then we could go get ice cream next time.

14. SPSpeaker10:13

    [laughs]

15. STStanley Tang10:13

    Um, [laughs] so, so yeah, I think that kind of, um... And, and now of course, we, we've scaled across different cities. Um, now we have to worry about building out automated solutions and, and dispatch systems and figuring out how do you match demand and supply and, and all, all that fancy technology stuff. But none of that matters at the beginning because at the beginning it's all about getting this thing off the ground and trying to find, um, product market fit. So just to summarize. So th- there's three things I would say that I learned from, from doing Doordash is first, test your hypothesis. You wanna treat your startup ideas like experiments. Um, the second thing is launch fast. We launched in, you know, less than an hour with a, with a really simple landing page. And, and finally, it's okay to do things that don't scale. Um, doing things that don't scale is one of your biggest competitive advantages when you're starting out, and you can figure out how to scale once you have the demand. And, and maybe once you've scaled, then you can go get that ice cream. Thanks.

16. SPSpeaker11:16

    [applause]

17. STStanley Tang11:22

    Sure.

18. SPSpeaker11:27

    How did your first customers hear about you?

19. STStanley Tang11:30

    Yeah. So question, question was how did our first customer hear about us? Um, our very first one, I have no idea. Um, we, we just launched Pal- PaloAltodelivery.com. We didn't do any marketing. Um, so I assume he just must have typed in Palo Alto Delivery into the, the web browser. Um, and then after that, we didn't do, we did barely any marketing. I think I sent out, like, one email to my dorm, and that was about it. It was all through word of mouth, and, and that kind of just validates, you know, just how strong of a need you found, you know, when people just start talking about you and they're willing to put up with all this, um, you know, terrible user experience, terrible design, and stuff like that.

20. SPSpeaker12:11

    When you started, um, it seemed so obvious to you. You were wondering why has no one done this. What's your answer now looking back?

21. STStanley Tang12:17

    Yeah, I mean, looking back, I think, um, I think the biggest thing is, is mobile. Um, s- the fact that now everyone has one of those in their pocket, and we kind of saw that trend and, and thought, you know, what if you can design, you know, a delivery system that was entirely based off mobile? You know, where you don't have an... You don't ha- have to have any infrastructure, um, or delivery fleets. Instead, you could, you know, instead of hiring drivers full time, purchasing vehicles, what if you can tap into a more of an on-demand pool of independent contractors and only send orders to them, um, when, when they have time. So, so that's kind of the, the insight we had. We, everything was done through mobile. Yeah.

22. SPSpeaker13:07

    Um, did you know you were gonna be a startup, or were you just making some money on the side at first?

23. STStanley Tang13:12

    Yeah, I mean, at the time we just wanted... We were all really passionate about building technology for small business owners. Um, and, and honestly, this delivery thing came out of a experiment, right, with the landing page. Like, it wa- it was literally an experiment. We, we didn't, we weren't expecting anything, and it just took off and, and we went with it. And logistics was always something we were really passionate about as well. You know, like logistics, transportation, and it's kind of the perfect fusion of, you know, how do you help small business owners through delivery? Back, yeah.

24. SPSpeaker13:45

    Did you launch the mobile app first or the website? And how long did it take from idea to the first launch?

25. STStanley Tang13:54

    Yeah, it was, we started with this, this, this landing page right here. Um, took us an hour to launch.

26. WWWalker Williams14:05

    Um, how does DoorDash stand out in a space filled with, uh, Grubhub, Postmates, and Seamless, and other companies?

27. STStanley Tang14:11

    Yeah, um, y- yeah, the question was how does DoorDash stand out among a very competitive space? I mean, I mean, in the beginning, I mean, for us, consumer demand has never been the problem even up until now. So for us, it's just about, you know, finding a need and, and just focusing on serving that, serving that demand. So in the beginning, competition doesn't really matter when you're getting started.

28. SPSpeaker14:40

    How long did you dedicate to incorporate into a company after you first delivered?

29. STStanley Tang14:44

    Yeah, question was how long it took for us to incorporate into a company, uh, when we went through YC. So we launched in January 2013, and then we did YC that very summer, and we, when we decided to take this idea through YC, we incorporated.

30. SPSpeaker15:00

    Stanley, let's do one more question.

Episode duration: 52:13