by Paul Buchheit12/9/2020
DoorDash is the first company that I’ve had the opportunity to follow all the way from YC application to IPO, so to celebrate I thought it would be fun and interesting to share what a great company like DoorDash looks like at the earliest stages.
Meeting startups at the very start of their journey is one of my favorite parts about working at YC. By the time a company is successful enough to IPO, the many doubts and uncertainties of the early stage startup are largely forgotten, replaced with a hindsight that makes their path to success seem so much more obvious and predictable. The founders are likewise transformed by the many years of struggle and personal growth necessary to build and successfully lead a large business. Gone is the uncertain new startup founder, replaced by someone almost impossibly formidable and experienced.
In order to join YC, startups must first fill out an application, including a one minute video introducing the founders and explaining what their startup does. Here’s the original DoorDash video:
Providing a concise explanation of what you are doing and why is the key to a great application video, and the DoorDash founders clearly succeeded at that. Even more impressive is the fact that now, over seven years later, the what and why of DoorDash remains the same, including their commitment to helping local businesses succeed. This quote from their S-1 perfectly matches the application video: “DoorDash has always been about helping local businesses succeed, more so than about food delivery. As students at Stanford, we canvassed the Bay Area asking dozens of local businesses what they needed to grow their business. When they shared the challenges related to delivery, we were surprised. Delivery was not a new idea, yet outside of New York City in the United States, very few businesses offered it.” You know it was a good application video when the same pitch can be reused in the S-1.
Once the applications are all reviewed, we invite the top startups in for a ten minute interview. I first met and interviewed the DoorDash founders on Friday, April 26, 2013. My notes described them as simply, “Caviar for Palo Alto”, and mentions that they “brought cookies”. Arguably, my first DoorDash delivery.
The company was not yet incorporated or funded, they didn’t have an app (only a website at http://www.paloaltodelivery.com/), they had only launched a few months prior (initially just a landing page with a phone number), and had completed just 217 deliveries.
The business was anything but proven, but they were doing exactly the right things: delivering food, and talking to customers, restaurants, and potential drivers. Success would require solving the difficult challenge of satisfying all three groups of people. They were doing most of the delivery themselves at that point, so they had good insight into the practical difficulties of picking up food and getting it delivered to customers on time.
I wish I could say that I knew right then and there that they would be a huge success, but I did not. At the conclusion of interviews, we stack-ranked all of the new companies, and I placed DoorDash in the bottom half of the batch.
Months later, my skepticism remained. Here’s one of my notes from June 24, 2013: “So far, nothing is working that well. They need to keep trying a lot of different experiments to figure out user acquisition… I just want an app where I can order from anywhere and they make it all magically happen. Also, refrigerator magnets.”
I really wanted them to make refrigerator magnets. They wisely ignored that bit of advice.
But they kept trying new ideas, and finally on July 16, 2013 I noted: “Growing fast (up to about 35 orders/day from 19 two weeks ago). Figuring out how to acquire users and have good retention. Just started expanding to MV. Seem much more focused and energetic.”
And then I became a customer! July 23, 2013: “We used them for dinner a few days ago and it was great! (though they didn’t include a refrigerator magnet :() We need to make them succeed so that I can keep getting food delivered to my house.”
Later that week they had their big TechCrunch launch. That was followed by Demo Day in late August. Here’s their pitch:
Many investors were skeptical, and they didn’t make it onto the list of top picks from Demo Day, but fortunately they were able to raise a seed round and keep growing.
Although the formal Y Combinator program only lasts three months, we continue meeting with and supporting the founders for many years. In the case of DoorDash, that included helping them to raise a Series A, inviting them back to speak to newer batches of startups, and sharing their insights with the broader startup community. Through our YC Continuity fund we also have the ability to further support our companies by investing in their later rounds of funding.
In early 2016, Continuity made one of its first big bets, investing in the DoorDash Series C. This was not the easiest time to raise money, and it took many months for the round to come together. At the time, Amazon and Uber, two very large and very formidable competitors, had both just started doing food delivery, and people questioned whether DoorDash could survive. Although the odds were clearly against them, I had seen them continually growing and improving from the very start, and strongly believed that they could overcome those odds. Unlike Amazon or Uber, they were 100% focused on this, and had been for years. Never underestimate a great team that stays focused, and continues to improve day after day, year after year.
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