The SaaS Podcast – AI, Growth & Product-Market Fit for SaaS Founders

Episode: SaaS Distribution Channel: Partner Deals to $100M ARR
Host: Omer Khan
Guest: Zhong Xu, Co-founder of Deliverect
Date: March 12, 2026

Overview

In this episode, host Omer Khan interviews Zhong Xu, the co-founder of Deliverect—a platform connecting restaurant delivery channels like Uber Eats and DoorDash into a single system. Deliverect is approaching $100M ARR, serving 80,000+ restaurants in 50 countries. Their journey covers bootstrapping, rapid product iterations, finding product-market fit, leveraging partner distribution, and addressing existential AI threats and opportunities in the SaaS industry.

Zhong shares candid, practical lessons about building and scaling SaaS businesses—emphasizing real product-market fit, the underestimated grittiness of distribution versus product, and the evolving landscape with AI.

Key Discussion Points & Insights

1. What is Deliverect and Market Context

• Deliverect operates as the operating center for restaurants and retailers, managing digital sales channels (Uber Eats, DoorDash, Grubhub, own apps, kiosks, etc.) into a single system.
• The platform automates menu, order, customer, and promotion management for 80,000+ restaurants and processes over $25B in transaction value.
• Scale: 450+ employees, 13 global offices, adding 8,500+ restaurants in Q4 2025 alone.
  • “In August we processed in total more than a billion orders for these businesses. That was almost $25 billion that went through our system.” —Zhong Xu (05:55)
• Impact: Deliverect is the digital backbone for restaurant operations globally.

2. Origin Story & Early Lessons

Family Roots and Early Experience

• Zhong’s entrepreneurship started at 17, building websites for Chinese restaurants due to his father’s influence—himself an immigrant who built custom POS systems.
  • “Between my 16 and 18, I made over a thousand very, very ugly, I would say, Chinese websites. So that really taught me the entrepreneurship side.” —Zhong Xu (07:38)

Building Product in the Real World

• First venture: iPad point-of-sale (POS) system—built while working a full-time job; merged with Lightspeed, which IPO’d in 2019.
• Learned the importance of talking to customers directly and leveraging deep domain knowledge.

3. Ideation & MVP Approach—Do Things That Don’t Scale

• Customer-led insight:
  • The idea for Deliverect came directly from ongoing conversations with restaurant customers frustrated by fragmented digital orders.
  • “Most of the ideas… come from just listening to customers.” —Zhong Xu (10:45)
• MVP ("Wizard of Oz" method):
  • Signed up first 100 restaurants and manually processed every order before writing code.
  • “The MVP is almost no product. Do not overengineer it because you actually have no idea what you’re building… get to market as quick as you can.” —Zhong Xu (14:02, 16:39)
• Validation:
  • Conducted 200-300 restaurant interviews in the first three months to truly validate the pain was widespread and global.

4. Lessons in Product-Market Fit & Technical Scaling

• Avoiding Premature Optimization:
  • The first product had excessive features and non-scalable technology; Deliverect focused on architecture and future-proofing from early on.
  • “We did learn… if you find product-market fit, think about architecture and scalability because changing these things afterwards is really painful.” —Zhong Xu (20:51)

5. Distribution > Product—The Hardest Part

• Importance of Distribution:
  • “The idea doesn’t really matter that much… What’s really, really hard is distribution.” —Zhong Xu (12:34)
• Partner-first Distribution Engine:
  • Leveraged existing POS vendor relationships to scale via integrations and distribution partnerships, signing partners rather than selling one customer at a time.
  • “That partnership motion was very important to that success.” —Zhong Xu (29:36)
• Channel Conflict Management:
  • Always attributed sales/growth to partners, avoided competing with their own partners’ sales teams, and incentivized them (e.g., gift cards, strong relationship-building).
  • “You don’t want to create situations where they feel like you are not honest. Make sure they are successful, because when they are successful, you’re successful.” —Zhong Xu (31:46)

6. Pricing Strategy

• Always Charge for Value:
  • Started at $50/month and learned never to give away the product for free—paying customers are invested and provide real feedback.
  • “If a customer is not paying anything, it’s not a customer… Make sure you do charge a fee.” —Zhong Xu (35:17)
• Early Referrals for Growth:
  • Traded discounts for testimonials, case studies, and introductions to peers, leveraging customers as the best salespeople.

7. Geographic Expansion Mindset

• Early “Land Grab”:
  • Launched in multiple regions at once to reduce risk of entrenched incumbents and ensure top positions globally.
  • “After seven years in all the countries we are, we are number one or number two.” —Zhong Xu (36:59)

8. The Role and Threat of AI in SaaS

• AI is Transformative—but Compresses Change:
  • “Internet, cloud, mobile—and now it’s AI… Innovation is happening so rapidly.” —Zhong Xu (38:36)
• Operational and Product Use Cases:
  • Internal code generation: 30-35% of Deliverect’s recent code is AI-generated.
  • Product: building AI agents for restaurant operations—menu management, pricing, throughput optimization.
  • Preparing for agentic commerce (e.g., smart homes ordering food automatically).
• The AI Threat: “Don’t Get Commoditized”
  • Risk of losing the “intelligent layer” if innovation lags; commoditization happens if Deliverect becomes only a connectivity “pipe.”
  • “Once you lose that intelligence… someone else will. The intelligent layer is where the value is.” —Zhong Xu (40:35)
• Guardrails and Data Management:
  • Importance of controlling data, setting permissions, and avoiding ethical mishaps from unchecked AI agents.
  • “Reputation is very hard to win, very easy to lose.” —Zhong Xu (43:08)

9. Advice for Founders & Notable Quotes

• On Building vs. Iterating:
  • “There’s no such thing that you build and it will come… It’s iteration.” —Zhong Xu (23:36)
• On Early-Stage Imperfection:
  • “If you talk about restaurant, there’s, what, 10 million restaurants? Well, 10 million shots. There’s no real risk towards it.” —Zhong Xu (23:36)
• On Domain Expertise as Moat:
  • “Having that network and distribution and getting as quick as you can to the customers, that defines who wins, nothing else.” —Zhong Xu (26:13)
• On Learning and Bias for Action:
  • “If I want to go into a new space, I would talk to as many people as I can. I would learn, right? The reality is you don’t know what you don’t know.” —Zhong Xu (27:44)
• On Timing:
  • “People say it’s luck, but it’s not luck. Timing is everything.” —Zhong Xu (45:52)
• On Grit:
  • “A chip on the shoulder. I would say grit, but it’s a chip on the shoulder.” —Zhong Xu (47:24)

Timestamps for Important Segments

| Timestamp | Topic | |:-------------:|:-----------------------------------------------| | 03:04 | What is Deliverect & who is it for? | | 07:38 | Zhong’s entrepreneurship roots, family story | | 10:45 | Origination of the Deliverect idea, talking to customers | | 14:02 | MVP approach (“Wizard of Oz” manual processing) | | 18:57 | Validating market demand, start of coding | | 20:51 | Scaling mistakes and lesson on architecture | | 23:36 | Early product iteration advice | | 26:13 | The power of network and domain expertise | | 29:36 | Partner-led distribution and scaling | | 31:46 | Managing channel conflict and partner trust | | 35:17 | Pricing evolution and reference-driven sales | | 36:59 | Global expansion and market positioning | | 38:36 | AI's transformative impact | | 40:35 | AI risks: intelligence layer, commoditization | | 43:08 | Guardrails, reputation, and AI pitfalls | | 45:52 | Best business advice — timing | | 46:36 | Recommended books | | 47:24 | Founder attributes — grit | | 47:42 | Productivity habit — using AI for ideation | | 49:27 | Personal passions — driving classic cars |

Notable Quotes & Moments

• “We started Deliverect around seven years ago. Deliverect is really the operating center or nerve center for restaurants... to manage the digital sales channels.” —Zhong Xu (03:04)
• “The MVP is almost no product… Do not over engineer it because you actually have no idea what you're building… get to market as quick as you can.” —Zhong Xu (14:02)
• “What’s really, really hard is distribution… For me… I always thought you build it, it will come. But actually, sales is really an engineering process.” —Zhong Xu (12:34)
• "If a customer is not paying anything, it's not a customer... if you're not getting money, they're not giving you real feedback." —Zhong Xu (35:17)
• "AI is transformational... innovation that's happening so rapidly... If we don’t disrupt ourselves... someone else will." —Zhong Xu (38:36, 40:35)
• “A chip on the shoulder. I would say grit, but it's a chip on the shoulder. I think most really successful founders have had something that they want to prove.” —Zhong Xu (47:24)

Lightning Round (47:48–49:47)

• Best business advice: Timing is everything (45:52)
• Book recommendations:
  • “The Hard Thing About Hard Things” (Ben Horowitz)
  • “Zero to One” (Peter Thiel)
  • “Positioning” (Al Ries & Jack Trout)
  • “Crossing the Chasm” (Geoffrey Moore) (46:36)
• Successful founder trait: A chip on the shoulder (47:24)
• Favorite productivity tool: Claude code/BMAT for ideation, using AI to challenge and refine ideas (47:42)
• Alternate career: Run a vineyard/make wine (48:22)
• Fun fact: Likes sitting in traffic jams—coded first business during daily traffic (48:42)
• Personal passion: Driving classic cars, Mille Miglia (49:27)

Key Takeaways for Founders

• Start with customer pain, not solutions.
• MVP can—and sometimes should—be entirely manual if it proves the pain and value.
• Speed trumps perfection early; iterate with real customers in the loop.
• Distribution—especially via partners and networks—is the hardest and most crucial lever in SaaS.
• Always charge for early product; non-paying users give little value.
• Don’t underestimate timing and the impact of rapid technological shifts (AI).
• Build relationships and domain expertise early—they become your moat.
• Guard your reputation and be proactive about the ethical challenges of AI.

Connect with Deliverect & Zhong Xu

• Deliverect: https://www.deliverect.com
• Zhong Xu: Reach out via LinkedIn

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