Advice Line with Tony Xu of Doordash
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
In this episode of the How I Built This advice line, host Guy Raz is joined by Tony Hsu, cofounder and CEO of DoorDash, to tackle business challenges from ambitious entrepreneurs. The episode features three callers seeking guidance on critical growth decisions: Ron from Steel Port Knives exploring product line expansion, Katherine from Spring & Mulberry navigating fundraising for her date-sweetened chocolate company, and Yori from Route 22 Meats figuring out how to differentiate in the crowded grass-fed meat market. (04:06)
- Main Theme: Strategic decision-making for small businesses at inflection points, covering product expansion timing, fundraising strategies, and market differentiation approaches.
Speakers
Guy Raz
Host of How I Built This, one of the most popular business podcasts in the world. Guy has interviewed hundreds of entrepreneurs and founded multiple media ventures, including his own newsletter platform that provides insights from world-class entrepreneurs.
Tony Hsu
Cofounder and CEO of DoorDash, the world's largest food delivery platform with over 2.5 billion orders processed as of last year. Tony immigrated to the US at age four, worked at the same restaurant as his mother, and built DoorDash from a simple idea at Stanford business school into a company with over $100 billion market cap. (04:15)
Key Takeaways
Focus Only on What You Can Control
Tony Hsu emphasizes that managing stress and staying focused requires identifying what's within your control versus what isn't. (09:11) He suggests writing down "what not to worry about" - things like competitors' resources or market conditions. Instead, focus energy on product development, customer service, and maintaining high agency activities where you can drive meaningful outcomes. This principle helps entrepreneurs avoid feeling overwhelmed and maintains their sense of purpose during challenging periods.
Test Product Expansion as Controlled Experiments
When considering expanding your product line, treat it as a manageable experiment rather than an all-or-nothing bet. Tony advises having a dedicated leader who can own the project end-to-end, ensuring adequate financial runway, and starting small with limited drops to your most loyal customers. (17:04) If the limited release sells out and generates buzz, the demand is validated. This approach protects your core business while allowing for strategic growth without risking everything.
Build Momentum Through Achievable Milestones
Rather than thinking about massive long-term goals all at once, focus on the next achievable milestone that you can deliver on. (31:01) Tony explains that consistently delivering on promises to investors and customers creates momentum, which leads to better outcomes and more financing opportunities. Work backwards from your next major goal - whether it's national retail distribution or market expansion - to determine exactly what investment you need.
Do Due Diligence on Your Investors
Entrepreneurs should research potential investors as thoroughly as investors research them. (34:36) Tony recommends asking about time expectations for achieving milestones, reviewing portfolio examples, and specifically requesting to speak with 3-4 founders whose companies didn't succeed with that investor. This triangulation provides crucial insights into how the investment firm handles difficult situations and whether they're the right long-term partner for your vision.
Find Your Fire and Keep It Burning
Success starts with identifying passionate early customers who deeply care about what you're building. (48:57) Tony uses the metaphor of building a fire - the most important thing is keeping that initial flame alive through passionate customers, whether they're fitness enthusiasts, clean eating advocates, or quality-focused restaurateurs. This core group becomes your foundation for authentic word-of-mouth growth, which is more valuable than expensive advertising for mission-driven businesses.
Statistics & Facts
- DoorDash processed over 2.5 billion orders as of last year, a massive increase from approximately 100 million deliveries when Tony first appeared on the show in 2018. (05:07)
- In 2013, only about 10-15% of restaurants offered their own delivery service, which created the market opportunity that DoorDash identified and capitalized on. (07:21)
- DoorDash now operates in over 35 countries, expanding from a single-product, single-geography company in the US to a global platform with five major business areas. (06:27)
