DoorDash CEO & Co-Founder Tony Xu

a few of these, it's totally fine. I'm Tony how was a product editor Square and the four of us came together about six months ago to work on software for small business owners. That's the application video Tony Shoe and his door Dash co founders submitted to get a ticket into why Combinators prestigious startup accelerator. Back fast forward nearly ten years later, and Doortosh has gone from a struggling food delivery story to a public company that's the

US leader in delivery. But the big question facing companies now is how to navigate a potentially prolonged economic downturn. Joining me on this edition of Bloomberg Studio one Point Oh, Doortosh, CEO and co founder Tony Shoe. Tony, it's so great to see you in person. Um. You went public in the pandemic. We're talking remotely, UM, but there's nothing quite like an in person interview, So thank you for being here. It's great to be here. You basically grew up in

a restaurant, as I understand it. What was it like leaving China, moving to Illinois and starting this new life. It was a classic immigrant story in many ways, I would say, looking back, almost a fairy tale like journey, where you know, my parents came to the US with two or fifty dollars in the bank. We immigrated to Illinois, Champagne, Urbanna. My dad got his degree at the University of Illinois.

My mom put food on the table by working three jobs a day, one of which did happen to be in a Chinese restaurant where I moonlighted as a dishwasher. So I got to hang out with mom that way as a way of growing up, and I did that. I mowed lawns, and that's really kind of how I saved up money to buy Nintendo games and do all the things that were the wonders of my childhood. What do you think you learned from that, you know, mowing

lawns early, washing dishes early. I think two things. You know, one looking backwards, it's just that you have to work to actually get things done. I didn't understand what it meant to live off of food stamps um, to buy groceries or free and reduced lunch you know every day inside school. Um, but it was a very empowering feeling to buy my own Nintendo or earn my way to buy my first Apple computer. The second thing was really

just the power of independent thinking. You know, my parents because they were so busy just trying to make a life for our family that I was largely left alone. So I grew up um, playing basketball, watching TV. That's how I learned English. I grew up moving around a lot as a kid, and as a result, I think that gave me a lot of time to realize that

it's pretty important to think for yourself. So you studied engineering at Berkeley, went to business school at Stanford, and you actually started out as an intern at Square I did. I I can't tell you how many people have said to me, Tony Shoe was my intern. That's where like, that's how long I've been doing this and how you know, doortash just kind of came out of nowhere. Yeah, I you know, it was It was actually a pretty stiff

competition between finishing school, Jack Dorsey and Keith. We're trying to convince me to leave Stanford and work at Square full time. It was a fun and busy period of my time, but but I enjoyed both. So how did the idea for doortosh come about? And the decision to not work for you know, Jack Dorsey and Square, which

I'm sure was also kind of intoxicating, right. The idea for DoorDash really came from this, you know, lifelong interest in helping these physical business owners, really people like my mom. So we talked to hundreds of small business owners and it was surprising to us that even in delivery was not a solved problem. There were business owners who would show us literally booklets of delivery orders that they would refuse.

I mean, we we're talking about thousands of dollars per week, which is you know, the difference sometimes between making payroll and and actually you know, surviving, and they would just turn them down because they were delivery orders, which to us was a really novel and unfortunate phenomenon and frankly unnecessary one. And that really became, you know, the impetus to start Tordosh. You started out driving for competitors, right, I was driving for a lot of different services to

try to actually understand you know, logistics. You know, my background, as you mentioned more engineering math, I thought I was going to be a cancer these dreaman that's pretty much what I spent all of my undergraduate days at Berkeley doing. Um that kind of one eight into a world of business.

But and so I think it's really important to really learn things for yourself, you know, to think from first principles kind of you know, again back to that independent thinking mindset I talked about as a child growing up, and try for uber Lift, I even drove for you know services they were a little bit older, you know, services like FedEx or Dominoes and really try to explore, you know, how does delivery work. And it was really

trying to understand you know, every component part. I mean, it sounds really simple, right, bring you a burrito from point A to point B, but there were actually twenty steps involved in that delivery. It just didn't appear as obvious to the naked eyes. Of the first two years of door to ashes life, we did delivers almost every single day. So where did you go from there? I mean, I mean early days. I know Elon Musk has said starting a company is like swallowing glass and staring into

the abyss of death. One of the first ones came actually as early as month three of the company's life, so we were maybe eleven weeks twelve weeks old as a company. Um, there was a big Standford football game in September and you know, long story short, we were laid on every single order and we had no ability to turn off the site. So it was just horrendous. Everyone in the company, all twelve of us, were delivering and everyone you know, rightfully so was furious because of

how late we were. And so we had a decision to make, you know, do we do the right thing and refund you know, every single customer, which would have cost us about our bank account, um, or do we you know, do a less right thing and and survive another day because it was very hard for us at that time to raise capital, which you know was something

true for Doordash's early history. And you know, it took us about thirty seconds to click submit refund, and you know the lesson for us always as a founding team and frankly even today as a as a company, as we'd rather die chasing excellence than lived to be mediocre. It wasn't so obvious either in the in the earlier years. I remember you did a down round. I think you

actually came on the show around that time. How did you weather the doubters and the you know, the people who didn't believe There were about a thousand days in the desert between seventeen and eighteen. Sometimes with company building, UM, so long as you can convince yourself because time is

your most precious resource, you should keep going. And if you can keep going long enough, you might get lucky enough to make it so over time, How did you balance quality with the need and desire to scale and then scale globally? In these types of businesses where it's low margin, high complexity, you really have to figure out what your unit of business is. You know, for us, that was a city. So in order to before going to seven thousand or ten thousand cities globally, we made

one city work. And after city one worked, we made city to work. And after we started getting higher and higher confidence that we can make baskets of cities work irrespect of the geographies or what you know, the customer situation look like, or what the merchant makeup was. Then we gained the confidence to actually roll out everywhere. Then came the pandemic. Um Brian Chesky has said the pandemic was like a torpedo for Airbnb. Was it like the

opposite for Doorda? It was like the biggest wave behind her back, which you know, had the ability to break us, and and and almost did because we grew two x in two weeks. We went from a singular US restaurant delivery business that's what you and I would be talking about in to today five businesses in twenty seven countries. You know, much more than just restaurants and and so all of that was created in the last two years.

Georges went public middle of the pandemic, and I remember actually you were coming on Bloomberg and the price doubled at the open, and we were coming out of obviously terrible economic times. You know, the depths of the pandemic. What do they feel like when you know you're going on into the world starting to sell to public investors and the price just doubles. It was certainly very exciting.

It was exhilarating. You know, it was the first time that you know, our company went public, the first time that I had ever undergone any of those types of experiences before. But at that, you know, in the back of my head at you know, it was that saying that you're never as good or as bad as they

say you are, and so just remember that. So tease that out for me a little bit, because the big question is how much do customers keep ordering out in a high inflation environment, how much long term you know, sustainability and growth is there. Really, Even though Covid is now effectively sustained and we understand how to live with it, customers are continuing to order Those that joined us during the pandemic, they're still ordering out about the same rights

as those who joined us before the pandemic. And that's because eating out and getting things delivered are pretty complimentary. On the second point around inflation, you know, I can say then the last sixty years, and looking at the data, spend in restaurants and engross have only declined in two of those sixty years, including high inflationary times, much higher

than what we observe today. And so what I think I take um, you know, solacen, even though I see the fact that there is high inflation, is that customers are going to continue spending on food, and our job is to bring greater and greater affordability. More broadly, the economy is in a tough position. Your competitors have announced layoffs and hiring freezes and slow downs. Is door dash

considering any of these? And I think we've been fortunate mostly because most of our investments that happened during the pandemic really were meant to build new businesses, and those new businesses have continued to grow. New businesses, you know, beyond restaurants in categories like grocery, convenience, um or retail, new businesses overseas. You know, we announced a large acquisition Involt where that really helped double our overall addressable market

to seven million people. New businesses and building an advertising business, new businesses, expanding our services and building a platform to help businesses build their own digital operations. Do you see dortosh is more of a super app of the future or is it something different? Well, I see Doortash as really solving two problems. You know. Problem one is how do we bring incremental demand to all the physical businesses as they kind of figure out their own digital in

house capabilities. And the second problem we're trying to solve is bring tools to these businesses. There's still a lot of competition and delivery. Who do you think survives the delivery wars? Who doesn't and why? Well, delivery is a scale economies game. You know, at the end of the day, you can survive even doing deliveries. From a singular story, you know, there's still mom and pop pizza shops and

Chinese restaurants that do their own delivery. Do you see dortash as a challenger to like Walmart, Amazon, Well, I see doortash Um, you know, as a champion of local businesses and physical businesses. I don't think that a world in which we just get what we want to buy or consume for a few places is a world that again is as worth enjoying living in it. For our job is to make sure that all of these businesses, all of the millions of physical businesses globally, can continue

to compete. I do a lot of door dash helps me be a working mom whenever I interview you. I get pings from dashers and some of them say they don't get paid enough. Some of them seem pretty angry. What's your response to them. We want the local economy to grow and to thrive. That includes dashers. We have three million dashers that come to the platform every single quarter, and so it's really important to me what they say. And it's in fact why you know the company myself included,

we still Dash do deliveries. In other words, once a month. You still do deliveries once a month. It's why we have a Dasher Community Council that we started three four years ago. Now, I want to see one of your memos after a delivery? Are you like sending notes? I'm texting. It's not even after the delivery. I'm texting, you know, not texting while I'm driving, but texting after after I complete the order from your deliver rais what have you learned? Everything?

All of the details, everything from you know, pay considerations, um UM, everything from UM operations at a store. You know which stores are a bit faster in their operations or more consistent, which stores are are less consistent. Where do you find the last parking space? In downtown San Francisco. UM, all of these details matter. They matter for efficiency, they matter for driver pay, they matter for merchant earnings. And so as a result, you know, what I say to

dashers is please continue to talk to me. I'm just Tony at door Dash, and we're always trying to, you know, make things better. We're not saying that we're perfect, but when we look at um, you know the data that we've collected, you know, the average dasher is making an hour nationwide when they're on when they're doing deliveries and so and most ashes are pretty satisfied. So door Dash has been expanding internationally. Sounds like you're on the road a lot. I'm on the road. I am on the

road u as Canada, Australia, at Japan, where elsewhere? Next? Germany, you know, Israel, Finland, UM, a lot of the Nordics. UM. So, so we're in we're in twenty seven countries, UM and and and a lot of that is run by you know, the Volts team that we were lucky to partner with. Beyond volt How are you thinking about M and A. Are there any verticals or areas in particular where you

might be interested in acquiring. You know, we have five businesses, the US restaurants business, the new Categories business with a focus on comedians and grocery non US international twenty seven countries, are B two B business, and our ads business. So we have quite a full plate on M and A. Specifically, it's a high bar. M and A. I think sometimes looks a lot better on paper than can be achieved

in reality. And I think it's because you're talking about, at the end of the day, combining human organizations, not just businesses or products or lines on a spreadsheet. I think you have to deliver upon that promise, and so for us the bar isn't just does it add to our business, but does it a actually add to our culture. You've been piloting rapid delivery, right, rapid delivery, But rapid delivery seems to be contracting. What are you seeing in

your pilots? Is this some where you think you'll expand or no? So I think customers are always going to have expectations that go in one direction, right. I don't think we're going to want things delivered more slowly over time, or at higher prices or with less selection. Our core use case right now is lunch and dinner, which is highly repetitive, highly profitable, which allows us to invest in things like fast deliveries. You bought Chowbotics last year but

shut it down. This is robotics, robotic kiosks, right. Um, I'm curious how you're thinking about AI and um, you know Uber shut down it's self driving stuff. Then they've started it back up. Um, you know, how are you thinking about AI and moonshots and some of this, you know, potential new technology and how it could help door dash or not? Like is it is it just not ready for prime time when it comes to platform shifts or new technology use AI, autonomy, you know, other types of technologies.

I tend to like to make the investment. I think that's a more appropriate choice to not miss the shift. However, I think it's very important to get the pacing right. I still think that the merits behind what you know, we were trying to do in partnership with the Chabotics team, was was the right idea in which we can help restaurants effectively build you know, a cheaper cost product. That's ultimately what we were trying to do, but we weren't

ready yet with the technology. You recently joined Metas board. What's it like working with Mark Zuckerberg. It's been fantastic, you know, it's been a terrific learning experience, you know, learning from Mark all the way to the incredible management team at that company. It's has a broad mandate of different products and as well as initiatives, and it's been

a privilege. Facebook and that are very controversial platform. Um, there's you know, controversy about whether Facebook is really good for the world, whether Facebook should have as much power as it should. How do you think about that? And how are you advising Mark about how to use that power.

With great power comes great responsibility. And I think Facebook has a lot of influence UM and met as you know, different properties as as you know, I'm sure you cover you know, served billions of people you know, every single day, and and and that that that's an enormous privilege and an enormous responsibility that they take incredibly seriously. Like should

any company be more powerful than multiple governments combined? I don't think I see it, you know, exactly that way, right, because it's still a contract between between you know, the company and its users. I think what's important for men to do and they're doing this absolutely is how do we set the guard rails, you know, to make it fair safe for everyone? And this is very, very very difficult.

You're also an investor a number of different startups. One of them is I'll yes, Web three company, any plans to accept crypto, any plans for DoorDash to accept crypto. Crypto right now is going through a period where it's trying to, you know, figure out what's next in terms of its use case. You know, I think everyone myself included, very bullish on the technology of what the blockchain enables. What do you think could be the future of blockchain

technology in food delivery and delivery in general. Well, I I don't know if it's going to get applied directly, you know, to food or or or to delivery. I mean, I think, you know, it absolutely has the potential to create a new economic infrastructure, right and economic structure that can really serve as the basis for new banking systems um um in etcetera. And so I think that's something more that's tangential to the world of delivery. Obviously, payments is one part of of what we do, but it's

not the central thing. So we're gonna do a little rapid fire, a little quicker fun questions. Favorite food I've ordered from eleven d different doorsh restaurants, So I actually like to try everything. Your business, idol. There are people in retail that I've admired. You know, the people that founded um everything from Walmart to Costco, UM, the team in Amazon, you know, in e commerce, the team UM Elon Musk and what he's trying to do. What about

Elon must buying Twitter? If he has time to to to run a third company, I think that'd be fantastic for the world. You grew up in Illinois, you live in California. You like basketball? Ye, favorite team Warriors. I grew up in the golden days of Michael Jordan's you know Scottie Pippen and and actually you know both the early nineties as well as the later nineties in which they won three in a row. I'm still a Bulls diehard, even though we're in a rock patch right now. I

wo you also like to run. You run marathons? Well, I don't run marathons today, so just to be clear, but I do run every day. So that's been my sanctuary, if you will, for the past ten years, Okay, you're still pretty young. How do you think having kids has changed you as a leader? You know, I think kids are amazing in that they're experiencing the world for the first time, being able to listen versus to you know, talk at or to dictate an opinion. You know. I

think that's been, you know, a big lesson. I think the second one is the power of curiosity. You know, kids, especially my kids at their ages of two and four, are asking the question why a lot, and I think it's the best question, and it's so hard to answer because you know, it requires clarity of thinking on everything, on the most basic things, too more complicated things. How

has being an Asian American CEO impacted your experience? Well, I think being an Asian growing up where I was the only Asian um and that was kind of my experience in Illinois certainly had a big experience and where um it very directly. You know, um, I saw firsthand,

you know, whether it was bullying or discrimination. But but I think if I were more broadly classify that to the privileged position that I'm in today, I'm still a minority in the sense that there aren't as many Asian American CEOs or founders as maybe founders from other backgrounds, And so I think it's that reminder to you know, one always recognized that. And then I think, secondly to

always keep the underdog mentality. Do you think you faced more challenges than others because Asian American CEOs are so under represent Asian Americans are underrepresentative in leadership roles in tech full stop? I can't say that, um, you know, for me personally in building door dash was that the experience?

But look, I think it's your your writing calling out when I look around me and when I look at especially public company UM founder CEO as well, hey there aren't that many be when you start filtering for you know, those from Asian descent, it's a it's a much much smaller list. And so I take that with you know, great pride. I also take it with great responsibility really and again remembering to invest in those who maybe don't come from privileged backgrounds, giving them an equal shot at it,

and to always to stay hungry. You change your name to Tony when you moved to the U S. You're five years old, after Tony Danza, who was the star of Who's the Boss. Correct. I loved that. I did you know, no one could pronounce my Chinese name, and so I said, okay, well let's just make it easier. And so I walked with my dad to the immigration office and legally changed my name. Did life change? Did it feel like life changed? After that? It felt a lot easier to say, Hi, I'm Tony, UM. What's it

like being the boss? Now? Okay, Honestly, I think I don't see myself that way, and and I recognize that that's probably not how others view me. But I really view myself as a teammate. And you know, for me, I think it's trying to make that actually true, make the reality of how I feel true to the perception that maybe others have of me as the boss, and and making that distance shorter and shorter. Bloombrook Studio One Point I was produced by Lauren Ellis and edited by

Matthew Soto. I'm Emily Chang, your host and executive producer. Thanks for listening. The Sad Shad sh