CEO DailyCFO DailyBroadsheetData SheetTerm Sheet

How DoorDash took the lead in food delivery

February 12, 2020, 10:28 AM UTC

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.

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
@alansmurray
alan.murray@fortune.com

TOP NEWS

Smoking gun?

U.S. officials have finally made public their allegation about the threat that Huawei equipment poses to 5G (and other) telecoms networks. Equipment manufacturers always have to build spying capabilities into their products, for the benefit of law enforcement—but they're not supposed to be able to gain such access themselves, without the network operator's permission. Per the Wall Street Journal: "U.S. officials said Huawei has built equipment that secretly preserves its ability to access networks through these interfaces, without the carriers’ knowledge." WSJ

Ghosn suit

Nissan has filed a more-than-$90-million civil lawsuit against former CEO Carlos Ghosn in Japan, claiming he owes the carmaker for private use of the company jet, payments to his sister and various other allegedly fraudulent perks and payments. Ghosn won't be undergoing a criminal trial in Japan, as he's fled the country. Financial Times

SoftBank shares

SoftBank shares popped almost 12% today, after a U.S. district judge approved the merger of Sprint, in which SoftBank is a major shareholder, and T-Mobile. That's in Japan—over in the U.S., Sprint's share price rose by an astonishing 77.7%. However, the California Public Utilities Commission still needs to clear the transaction. CNBC

Internet regulation

The British government is tasking broadcast regulator Ofcom with regulation of social media. Under draft legislation, Ofcom will have to ensure that the likes of Facebook and Twitter abide by a new legal "duty of care" to protect users from harmful content ranging from bullying to terrorist material. Expect a debate about censorship. Bloomberg

AROUND THE WATER COOLER

Coronavirus named

The coronavirus that is hammering China and scaring the world now has a name: Covid-19, which is more pronounceable than its previous designation of nCoV-2019, and more specific than "coronavirus" which, after all, is a classification that also takes in everything from SARS to the common cold. "Covid" is an amalgamation of "corona", "virus" and "disease", while the 19 refers to the year the outbreak began. Future coronavirus outbreaks will follow the new naming convention. BBC

Covid-19 cases

Speaking of which, China claims the number of new Covid-19 cases is now falling, and the outbreak may be over in April. London stocks were buoyed on the news, but experts warn the contagion's peak may still be in the future. Reuters

New Hampshire

The Democratic New Hampshire primary happened yesterday and Bernie Sanders won, with Pete Buttegieg close behind, and Amy Klobuchar—riding newfound momentum—earning a respectable third place. But Elizabeth Warren and Joe Biden both polled single digits. Andrew Yang and Michael Bennet have dropped out; the pack is thinning. Fortune

Roger Stone

Four federal prosecutors have protested the Justice Department's intervention in the sentencing of Roger Stone, a longtime Trump ally who obstructed a congressional investigation, tampered with witnesses and made false statements. The prosecutors recommended a nine-year sentence; Trump's Justice Department overruled them. One resigned outright, while the others quit the case. New York Times

This edition of CEO Daily was edited by David Meyer.