Crucible Moments: LIVE with DoorDash’s Tony Xu and Miki Kuusi on Scaling Operational Excellence

In the latest episode of Crucible Moments, hosted by Sequoia Capital’s Alfred Lin, listeners are treated to an in-depth discussion with DoorDash co-founder and CEO Tony Xu, head of International Miki Kuusi, and Sequoia partner Alfred Lin. Released on November 14, 2024, this episode delves into the pivotal decisions and strategies that have propelled DoorDash to its status as a category leader in the food delivery industry. Highlighting the company’s journey from inception to a $60 billion market cap, the conversation offers valuable insights into operational excellence, scaling challenges, and the nuances of leadership within a rapidly growing organization.

Founding and Early Growth

The conversation begins with Alfred Lin providing a brief history of DoorDash, noting its foundation by Tony Xu in 2013 and the subsequent merger with Volt, founded by Miki Kuusi in 2014, in 2020. Lin emphasizes DoorDash’s impressive financial trajectory, stating, “There was about $80 billion of gov from the Q2 numbers, which was $10 billion in revenue and $1.7 billion in EBITDA” (00:50). This rapid growth is attributed to the relentless dedication of the team, exemplified by their early morning runs to set the company’s pace.

When questioned about the belief in achieving such milestones within a decade, Tony Xu humbly responds, “Believe takes you far” (01:53). Miki Kusi adds depth to this sentiment, explaining that foundational strategies were about “getting going and having a point of view on what the end state is” (02:02). This pragmatic approach allowed DoorDash to focus on incremental growth, starting with restaurant deliveries and progressively expanding to other services like campus deliveries.

Operational Challenges and Excellence

Alfred Lin shifts the conversation to operational excellence, referencing Bill McDermott’s perspective on its challenges. He asks, “How painful is it?” (05:19). Tony Xu recounts a pivotal moment in the fall of 2015 when DoorDash faced significant operational failures during a delivery launch, stating, “How is this ever going to scale? How is this ever going to work?” (05:40). This experience underscored the importance of balancing an exceptional customer experience with operational efficiency at scale.

Miki Kusi elaborates on defining excellence, highlighting the role of continuous improvement driven by customer feedback: “Very easy when I get like 600 emails a day about like why we suck, you know, or why we could do better” (07:20). This iterative process ensures that DoorDash consistently raises its standards across all aspects of the business, from product development to hiring practices.

Scaling and Leadership Evolution

As DoorDash scales, the leadership dynamics evolve. Alfred Lin probes into how leadership styles and company culture adapt with growth (11:57). Miki Kusi articulates that while the core culture remains intact, the mechanisms to sustain it must evolve: “You have to be more and more in love with the problems as opposed to solutions” (12:06). She emphasizes the importance of alignment on priorities and fostering institutional knowledge to maintain resilience.

Tony Xu shares his personal growth in leadership, noting the shift from patience to a heightened sense of velocity: “My number one word I use is velocity. How can we do things faster?” (14:49). This emphasis on speed reflects the company’s need to remain agile and ambitious amidst its large-scale operations.

Mergers and Acquisitions Insight

The discussion transitions to the merger between DoorDash and Volt, with Miki Kusi providing insights into their strategic approach. She prioritizes team strength over traditional metrics in mergers, asserting, “The strength of the team” was a critical factor (19:51). This focus on integrating leadership and ensuring cultural alignment was pivotal in making the merger successful.

Tony Xu adds, “The superpower of the founder is to be in the detail... The superpower of the CEO is to build a team, have a vision...” (17:18). This complementary dynamic between founders and CEOs facilitates effective integration and sustained growth post-merger.

Navigating Labor Laws and Future Ambitions

A significant portion of the conversation addresses the complexities of operating in diverse labor markets, particularly in Europe. Tony Xu discusses the challenges posed by varying labor laws and the necessity for regulatory reforms to accommodate the gig economy: “It allows for a whole new category of work... You should probably regulate this in a way that makes sense” (23:10). He highlights the efforts in multiple European countries to adapt labor regulations that balance flexibility with necessary protections.

Looking ahead a decade, Miki Kusi envisions a more integrated online and physical world, driven by automation and data: “Things in the physical world will too. The question is like how?” (25:35). This foresight emphasizes DoorDash’s commitment to evolving alongside technological advancements and societal changes.

Conclusion

The episode concludes with Alfred Lin affirming DoorDash’s strong position as a long-term investment: “I hope you guys know why Doordash is a long term hold in the Sequoia Capital Fund” (29:02). Tony Xu and Miki Kusi leave listeners with a sense of DoorDash’s strategic vision and unwavering dedication to operational excellence.

Key Takeaways:

• Vision and Pragmatism: DoorDash’s growth is rooted in a clear vision combined with pragmatic, incremental strategies.
• Operational Excellence: Balancing customer experience with operational efficiency is crucial for scaling.
• Leadership Evolution: As companies grow, leadership styles must adapt to maintain culture and drive velocity.
• Strategic M&A: Prioritizing team strength and cultural alignment is essential in mergers and acquisitions.
• Future Outlook: Navigating labor laws and embracing technological advancements are pivotal for sustained growth.

This episode offers a comprehensive look into the strategic decisions and operational challenges that have defined DoorDash’s journey, providing valuable lessons for entrepreneurs and business leaders alike.