Food delivery is a competitive business. But DoorDash CFO Prabir Adarkar told me beating the competition ultimately comes down to the product.
“What the data shows, particularly third-party data,” is that DoorDash is leading in consumer retention said Adarkar, who joined the company in 2018.
A November 2020 white paper by Escalent, a human behavior and analytics firm, found that DoorDash has experienced customer loyalty amid the coronavirus pandemic. “The two most popular ordering platforms—local restaurant/private label delivery and DoorDash—were used by 43% and 42% of respondents who ordered delivery in the past month, respectively, with 50% of respondents indicating their intent to order from local restaurants,” according to the report. “DoorDash holds a commanding lead over its closest third-party rivals—GrubHub (23%), Uber Eats (17%) and Postmates (8%).”
As CFO, Adarkar monitors several metrics, but one he particularly focuses on is total orders. “It’s a metric that we report, externally,” he said. “The reason it’s important is because it speaks to the scale of our platform. But more importantly, it represents the proxy for the economic value that we created for merchants that are on our platform.”
DoorDash announced April 9 that its first quarter 2021 financial results will be released after market close May 13. The company had its initial public offering in December and soared on its first day of trading. Since then the stock has been on a bit of roller coaster, trading as high as $206 in February but closing Friday at $140. During the first nine months of 2020, amid the pandemic, the company’s revenue reached $1.9 billion.
“My job from the CFO seat is to ensure that we’re allocating capital and putting resources against problems to continue to improve, not just the consumer experience on the one hand, but also the merchant experience,” Adarkar told me. And to make sure that “Dashers have meaningful earning opportunities and that these earning opportunities are getting more lucrative over time,” he added.
Before and during the pandemic, “a few things we’ve found have been true —once a consumer orders online via DoorDash…new habits form,” Adarkar said; and those habits “tend to be sticky.” The pandemic “accelerated the adoption curve for on demand delivery,” he added.
At the start of his career, Adarkar was “firmly down the engineering path,” with both an undergraduate and graduate degree in the field, but an interest in business and finance made him take a detour, he told me. He earned an MBA at NYU and was then hired by Goldman Sachs in the technology, media, and telecommunications investment banking unit in San Francisco.
“Being steeped inside that investment banking universe gives me a sort of front row seat to high finance and understanding of the capital markets,” Adarkar said. That created “a natural transition to Uber,” where he was head of strategic finance, ultimately leading to his current role at DoorDash.
“Since day one, we’ve always been in a competitive industry,” Adarkar said, noting the DoorDash’s competitors typically had access to more cash. But that led to the “cementing of the culture that we’re going to do more with less,” he said.
“This kind of created a discipline across the company,” Adarkar told me. “The focus always needs to be on making sure that the product is superior compared to the product that’s offered by competitors.”
See you tomorrow.
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