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How DoorDash took the lead in food delivery

February 12, 2020, 10:28 AM UTC

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Good morning.

Tony Xu of DoorDash stopped by Fortune’s new offices yesterday for a fascinating conversation about how his company has propelled itself past Grubhub and Uber Eats to become the market share leader in food delivery. It carried a valuation of $12.6 billion at its last funding.

A few points from the conversation stood out for me:

  • Although it’s viewed as a technology company, it’s not technology that differentiates DoorDash from its competitors, Xu says. It’s “operational excellence… Things that are not sexy make all the difference in differentiating yourself in this space… The hard part is not the software.”
  • Although it grew up in the decade of “blitzscaling,” DoorDash until recently didn’t have the seemingly unlimited access to capital that enabled Uber and others to pursue a growth-at-any-cost strategy. “We dialed in the unit economics from day one,” he says, and that’s now benefitting the company in moving toward profitability. As he sees it, the “first mover advantage” is a myth. “I’d rather be the last mover.”
  • Purpose matters. From the start, Xu’s goal was to help businesses do better. That’s given him a leg up in partnering with companies like Walmart—which now does the majority of its grocery deliveries through DoorDash (though it must be said that delivery is a very small part of Walmart’s online grocery; most orders are picked up by customers at the drive up outside the stores). “This company is unique in its founding DNA of wanting to help companies compete.

Xu also offered up a new suggestion for our office collection of best business books: The Score Takes Care of Itself: My Philosophy of Leadership, by Bill Walsh, the late head coach of the San Francisco 49ers. The one thing he wouldn’t talk about: whether DoorDash will IPO this year.

More news below. And see why Intel CEO Bob Swan thinks 2020 will be “a record year” for his company, here.

Alan Murray


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This edition of CEO Daily was edited by David Meyer.