Bloomberg Studio 1.0 - DoorDash CEO & Co-founder Tony Xu

Bloomberg Studio 1.0 - DoorDash CEO & Co-founder Tony Xu

Show Video

So I saw a shark tank trailer. Yeah, it's a fire fight. What was the most like surprising thing about it? How kind? Mr. Wonderful. Actually soft he is. I guess he is. Yeah. He's a really nice guy. Did it give you any flashbacks to your wise days and the panic days of early entrepreneurship? Yes. And that they do that 45 minutes of

shooting for seven minutes of Aaron. Yeah. And so if the entrepreneur makes a mistake and there are a few of these. Yeah, it's totally fine. I'm Tony. How does the product enter the 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 Shue

and his daughter ISE co-founders submitted to get a ticket into Y Combinator, a prestigious startup accelerator, back in 2013. Fast forward nearly 10 years later, and Jordache has gone from a struggling food delivery story through a public company. That's the U.S. 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 1.0, Jordache CEO and co-founder

Tony. Tony, it's so great to see you. Great to see you, too, Emily in person. I know you went public in the pandemic. We're talking remotely, 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 my parents came to the U.S. with the tune of 50 dollars in the bank, we emigrated to Illinois champagne or banner. 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 mow 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, to buy groceries or free and reduced lunch. You know, everyday inside school. 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 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. You went to business school at Stanford and you actually started out as an intern at Square. I did. I can't tell you how many people have said to me, Tony Shu is my intern.

That's like that's how long I've been doing this and how. You know, Dada just kind of came out of nowhere. Yeah, I know it was. It was actually pretty stiff competition between finishing school Jack Dorsey and Keith, who were trying to convince me to leave Stanford and work at square full time as a fun and busy period of my time. But I enjoyed both. So how did the idea for Jordache come about and the decision to not work for Jack Dorsey and Square, which I'm sure was also kind of intoxicating, right? The idea for Doordarshan 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 2013, 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're talking about thousands of dollars per week, which is, you know, the difference sometimes between making payroll and and actually 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 the impetus to start Jordache. 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 in engineering math. I thought I was going to be a cancer researcher. I mean, that's pretty much what I spent all my undergraduate days at Berkeley doing that kind of 180 into 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 the drive for Uber Lyft, I even drove for, you know, services that were a little bit older, you know, services like FedEx or Domino's and really try to explore, you know, how does delivery work and is really trying to understand, you know, every component part. I mean, it sounds really simple. I bring you a burrito from point A to point B, but there were actually 20 steps involved in that delivery. It just didn't appear as obvious to the

naked eyes of the first two years of door to Ashley's life. We did deliveries almost every single day. So where did you go from there? I mean it. I mean, it's 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 11 weeks, 12 weeks old

as a company. There was a big Stanford football game in September. And, you know, long story short, we were late on every single order and we had no ability to turn off the side. 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 every single customer, which would have cost us about 40 percent of our bank account? Or do we, you know, do a less right and survive another day? Because it was very hard for us at that time to raise capital, which, you know, was something true for dresses, early history. And, you know, it took us about 30 seconds to click submit free fund. And, you know, the lesson for us always as a founding team and frankly, even today as a as a company is we'd rather die chasing excellence than live to be mediocre. It wasn't so obvious either in the

earlier years. I remember in 2016, you did a down round. I think you 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 2016 17 and 18, sometimes with company building? 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 you're a unit of business is. You know, for us, that was a city. So in order to before going to 7000 or 10000 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 irrespective of the geographies or what, you know, the customer situation look like or what the merchant makeup was, then we gain the confidence to actually roll out everywhere. Then came the pandemic. Brian Chesky has said the pandemic was like a torpedo for air B and B. Was it like the opposite four door DAX?

It was like the biggest wave behind her back, which, you know, had the ability to break us. And it almost did because we grew to X in two weeks. We went from a singular U.S. restaurant delivery business. That's what you and I would be talking about in 2019. To today, 5 businesses in 27 countries, you know, much more than just restaurants.

And so all of that was created in the last two years. The big question is, how much do your customers keep ordering out in a high inflation environment? Jordache went public middle of the pandemic, and I remember actually you were coming on Bloomberg and the price doubled at the opening, we were coming out of obviously terrible economic times. You know, the depths of the pandemic. What did it feel like when, you know, you're going out 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 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, 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 your customers keep ordering out in a high inflation environment? How much long term 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 at about the same rights as those who joined us before the pandemic, and that's because eating out and getting things delivered are pretty complementary. On the second point around inflation, you know, I can say that in the last 60 years and looking at the data spend in restaurants and in grocery have only declined in two of those 60 years, including high inflationary times, much higher than what we observed today. And so what I think I take solace in, 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 slowdowns.

Is Doordarshan considering any of these? 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 business is, you know, beyond restaurants in categories like grocery, convenience or retail. New businesses overseas. You know, we announced a large acquisition in VoLTE where that really helped double our overall addressable market to 700 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 Jordache as more of a super app of the future, or is it something different? Well, I see Doordarshan as really solving two problems. 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. There's still mom and pop pizza shops and Chinese restaurants that do their own delivery. Do you see Doordarshan as a challenger to Wal-Mart, Amazon? Well, I see Jordache 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's 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 DAX 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 DAX. We have three million dashes that come to the platform every single quarter. And so it's really important to me what they say and in fact, why, you know, the company, myself included, we still dash do deliveries, in other words, once a month. Do you still do deliveries? It's why we have a DAX Community Council that was started three, four years ago now. I want to see one of your memos after a

delivery. Are you like sending notes? I'm telling you, even after the delivery, I'm texting, you know it or not texting. I'm driving. Texting after her after I complete the order from your deliveries, what have you learned? Everything.

All of the details, everything from, you know, pay considerations, everything from operations at a store, which stores are a bit faster in their operations or more consistent, which stores or are less consistent where you find the last parking space in downtown San Francisco. 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 dashboards is. Please continue to talk to him. I'm just Tony at dawn and we're always trying to make things better.

We're not saying that we're perfect, but when we look at the data that we've collected, the average Dasher is making. Twenty four twenty five dollars an hour nationwide when they're on and when they're doing deliveries. And so and most actors are pretty satisfied. So Jordache has been expanding internationally. Sounds like you're on the road a lot. I'm on the road.

I'm on the road. U.S., Canada, Australia, Japan. Where else? Where next? Germany. You know, Israel, Finland, a lot of the Nordics. So it's into we're in 27 countries. And in a lot of that is is run by the Volt's team that we were lucky to partner with beyond Volt. How are you thinking about MNF? Are there any verticals or areas in particular where you might be interested in acquiring? You know, we're five businesses, the U.S. restaurants, business, the new

categories, business with a focus on convenience and grocery non U.S. International. Twenty seven countries are B2B business and our ads business. So we have quite a full plate on demand. Specifically, it's a high bar and many 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 actually add to our culture? You've been piloting rapid delivery, right? Rapid delivery, but rapid delivery seems to be attracting. What are you seeing in your pilots? Is this some where you think you'll expand or now? 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 or 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. I take that with great pride.

I also take it with great responsibility, remembering to invest in those who maybe don't come from privileged backgrounds. You bought Chao Bartok's last year, but shut it down. This is robotics. Robotic kiosks, right? I'm curious how you're thinking about A.I. and Uber shut down its self-driving stuff and they've started it back up. How are you thinking about A.I. and moon shots and some of this potential new technology and how it could help Jordache or not? Like is it is it just not ready for prime time when it comes to platform shifts or new technologies, A.I.,

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 we were trying to do in partnership with the Tribe IBEX team was was the right idea in which we can help restaurants effectively build a a cheaper class product. That's ultimately what we were trying to do, but we weren't ready yet with the technology.

You recently joined Metis board. What's it like working with Mark Zuckerberg? It's been fantastic. You know, it's been a terrific learning experience. Learning from Mark all the way to the incredible management team at that company. It has a broad mandate of different products and and as well as initiatives. And it's been a privilege. Facebook and better. Very controversial platform.

There's no 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. It matters different properties.

You know, I'm sure you cover, you know, sort of billions of people, you know, every single day. 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 exactly that way. Right, because it's still like a contract between between 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 guardrails, you know, to make it fair, safe for everyone. And this is very, very, very difficult.

You're also investor. I'm an investor in different startups. One of them is alchemy. Yes. What, three company? Yes. Any plans to accept crypto? Any plans for Doordarshan to accept crypto? Crypto right now is is going through a period where it's trying to 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 block chain enables. What do you think could be the future block chain technology in food delivery and delivery in general? Well, I don't know if it's going to get applied directly to food or water delivery. I mean, I think, you know, it absolutely has the potential to create a new economic infrastructure. Right. An economic structure that can really serve as the basis for new banking systems and et cetera. 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 you're going to do a little rapid fire. Okay. A little quicker. And your questions. Favorite food I've ordered from eleven hundred different Jordache restaurants. Wow.

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 everything from Walmart to Costco to the team at Amazon, you know, in e-commerce, the team Elon Musk and what he's trying to do. What about Elon Musk buying Twitter? If he has time to to run a third company, I think that be fantastic for the world. You grew up in Illinois. Yeah. You live in California. You like basketball? Yeah.

The favorite. That's not warriors. I grew up in the golden days of Michael Jordan. Scottie Pippen and I actually, you know, both the early 90s as well as the later 90s in which they won three in a row. I'm still a Bulls diehard, even though we're in a rough patch right now. I hope 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 10 years.

Your kids are still pretty young. 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 a big lesson.

I think the second one is the power of curiosity. You know, kids, especially my kids at their ages of 2 and 4 are asking the question, why? A lot. And I think it's the best question. Oh, it's so hard to answer because, you know, it requires clarity of thinking on everything. On the most basic things to more complicated things. How does being an Asian-American CEO impacted your experience? Well, I think being an Asian growing up where I was the only Asian and that was kind of my experience in Illinois, certainly had a big experience at where it very directly. You know, I saw firsthand, you know,

whether it was bullying or discrimination. But but I think you've heard 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 underreported? I mean, Asian-Americans are underrepresented in leadership roles in tech. Full stop.

I can't say that, you know, for me personally in building door. What was that experience? But look, I think it's you're right in calling out that when I look around me, I want to look at especially public company founder, CEO as well. There aren't that many B 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 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 in Hungary. You change your name to Tony when you moved ISE five. Yeah. To the US, your 5 year old after Tony Danza. Yeah. Who is the star of Who's the Boss? Correct. I love it.

No one can pronounce mentioning his name. And so I said, OK, well, let's just make it easier. Yeah. And so I walked with my dad to the immigration office and legally changed my name.

Did life change it? Feel like life changed after that? It felt a lot easier to say. Hi, I'm Tony. What's it like being the boss now? Honestly, I think I don't see myself that way. And and I recognize that that's probably not how others view me. 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 making that distance shorter and shorter.

2022-10-27 18:52

Show Video

Other news