David Novak 0:04 

Welcome to How leaders lead where every week you get to listen in while I interview some of the very best leaders in the world, I break down the key learnings so that by the end of the episode, you'll have something simple that you can apply as you develop into a better leader. That's what this podcast is all about. Today's guest is Tony Chu, the co founder and CEO of DoorDash. Now getting a nice tasty burrito delivered to your door may seem very, very straightforward. But really, when you think about all the moving parts, you've got vendors and drivers, logistics, traffic, weather technology, well, there's just a lot of places where problems can pop up. But you know what, Tony and his team love to solve those problems. And they do it by breaking them down to the smallest details. So they really get clear on what's happening at DoorDash. Tony is creating a culture of action and ownership. Whereas people have both the skills and the attitude, they need to really dig into details. To be totally honest, we leaders sometimes overlook those nitty gritty details, and boy, can they come back to bite you. Because we never get the full understanding and clarity that we really need to solve the problem. Great leaders have to deal in reality. And sometimes the reality, unfortunately, is really detailed. Tony is a great leader who has the curiosity and hard work it takes to break problems down into detailed pieces. And there's a lot we can learn from them. So here's my conversation with my good friend, and soon to be yours, Tony Chu.

Tony, I want to thank you so much for taking the time to chat with us. Well, it's

Tony Xu 1:55 

great to be with you, David. Thanks for having me,

David Novak 1:58 

Tony with this lockdown. Right? You know, where are you working out of?

Tony Xu 2:01 

I'm in San Francisco.

David Novak 2:02 

Are you in your home? Or in your office? Or what do you do every day,

Tony Xu 2:06 

I've been at home sheltering in place, like, you know, all the good residents here in San Francisco and across the US. And, frankly, the world now and all of our teams are spread across the world, working from home,

David Novak 2:20 

you know, you're the co founder and the CEO of what has to be one of the most successful startups in the past decade. And, you know, I understand you you tell yourself and your your team members that you need to fire yourself every six months. What do you mean by that?

Tony Xu 2:36 

I think if you're lucky to be a part of something that changes very, very quickly, you know, anything that undergoes a doubling of the business every year, anything that you know, has the ability to, you know, grow 10 times in a short period of time, I think you're always in a mode of rapid learning. And I think no amount of preparation or necessarily experience can necessarily give you exactly what you need to get through some of these challenges. And so I think the number one thing you have to do in a type of setup like this, is to learn all of the time. And I think one of the things you learn very, very, very quickly is, number one, there's no amount of expertise that you can acquire, to solve every problem, because there's too many of them. And number two, there's always better people than you to solve each one of those challenges. And so, you know, and I think a good rule of thumb, at least for me, looking back on the almost seven years now at DoorDash is whenever there is an inflection point, and that typically happens in the six month period, sometimes even sooner than that. It's about finding someone either within the company or outside of the org to come and solve that problem better than I am able to after understanding of myself. And then moving on to the next thing

David Novak 3:58 

that reminds me Tony of what was one of my favorite leadership exercises, which I call it the hotshot replaces, you know, I used to used to ask myself a hotshot came in and took my job, what would they do? You know, and it really motivated me to do it before someone else would do it at Yum, because I really liked my job.

Tony Xu 4:17 

Yeah, I think I think it can be uncomfortable at first. But I think very quickly, you realize both out of necessity and frankly out of a desire to constantly improve and up level, the team as well as the potential for the company. You have to bring in you know, hot shots like you said, you have to bring in people better than yourself. Otherwise, you're never going to get to the next level.

David Novak 4:42 

As you know, one of the first responsibilities of leadership is to define reality. Tell us how you would define the DoorDash reality today?

Tony Xu 4:50 

Well, I think today especially during this pandemic, we've been privileged to get the chance to work 24/7 and see our mission empowering local economies realized almost every hour. I mean, when I think of, you know, the three audiences that we serve, you know, let's take, for example, the merchants, the local businesses who are really hurting. The reality for them right now is it's a very stark reality where it's about survival, it's about making sure that we can get cash in the door, as soon as possible. It's, you know, it's why DoorDash invested $100 million to give them their commissions cut in half, and that they can get the sales generated, you know, twice as profitable. When I think about the Dashers the drivers on the platform, it's about making sure that they can get those opportunities for flexible income. Because, I mean, a lot of these folks used to even weeks ago, days ago, some of them used to have jobs that now have been furloughed, or salaries that have been cut back. And so making sure that they have the ability to earn more than ever before, make sure that they are safe, that they get all of the you know, masks, sanitizers gloves and other personal protective gear, so that they can do their work safely, that they have financial assistance, if they were to ever get sick. Or if you know, they have to take care of a child to make sure that they get access to telemedicine help in the way that others may get access to seeing doctors and then when I think of the consumers, making sure that the most vulnerable amongst them, or can actually get served. I mean, the reality right now is we are sheltered in place. And we are at home. And I understand that we're hopefully knock on wood getting out of this. And but but it's still going to be somewhat of a gradual recovery, that whether it's the children who can't get access to lunch anymore, whether it's the health care workers who still need to be fed, whether it's the elderly, who don't have easy ways to get groceries, you know, those are the realities that we're preparing the company to serve 24/7 In every zip code across the countries that we serve. And when

David Novak 7:11 

you think past COVID-19, how much do you think the world has changed? And do you think you're better prepared for it prepared for it than you would have been?

Tony Xu 7:20 

I think the world is, has changed in a permanent way that, you know, we're still I think, realizing every single day. And I think one of the things I think about is is just how it's accelerated a lot of the trends that were already happening before this pandemic, and really showcasing the impact and the consequence in a very short period of time. Take, for example, you know, the local businesses, you know, we started DoorDash, really, for people like my mom who opened their business, and we're used to customers walking inside their doors. And even prior to this pandemic, that wasn't always happening. It wasn't as if every meal was consumed inside of a restaurant, it wasn't as if every purchase was made physically inside of the store. And I think it's not just that this pandemic, but even when I think after this recovery period, the ability to be able to do business in a world where customers aren't walking inside your stores. That's a very true reality. And it's the one that it's the biggest problem, in my opinion that will shape a lot of the economic transformation of most cities, because local businesses represents 60% plus of the GDP in most cities. And so DoorDash has a huge responsibility to make sure that not only can we help serve with our platform, but that we can also give the tools and the products that we build for ourselves to these local business owners so they can do the same for themselves and compete in the convenience and modern day world.

David Novak 9:01 

Tony, you mentioned your Mother, tell us about how you came up with the business idea for DoorDash.

Tony Xu 9:07 

You know, I never grew up wanting to be an entrepreneur. But I in many ways, almost not knowing it, you know, grew up watching an entrepreneur. You know, my family came to this country from China. And I was very young. I was five years old, and my dad was finishing his graduate degree at the University of Illinois. We didn't have much income coming into the family. We didn't have more than a couple $100 in the bank. So my mom was the sole relay provider for a while growing up and she did that by working three jobs a day for 12 years. All were for local businesses. One of them one of them was at a restaurant in a local Chinese restaurant in in, in in the Midwest where I grew up, and I got a front row seat as a dishwasher so I got to see her you know, really every day now not just be the best version of herself, but also, you know, be the best version for our family. Because her real dream David was wasn't to run a restaurant, it was it was to be a doctor. And so she, she actually deferred her dream for 12 years by working those three jobs. And then 12 years later, she took the savings that she had earned through those years to open up her medical clinic. And it's a it's a local business. It's a local business, she still runs today, you know, 20 plus years later. And so, you know, I think I grew up in the household of an entrepreneur, just just not knowing it at the time. But and we really started this company for people like her who, you know, every day go out to want to, you know, be the best version of themselves want to be their own boss, and, and really build something.

David Novak 10:52 

How did you go about the business of learning how to deliver food? And what did that teach you as a leader?

Tony Xu 10:59 

Well, I didn't know much about delivering food, when we started the company. But you know, one of the things I've always believed in, frankly, anything business, or other walks of life is you have to be able to understand things at the lowest level of detail. And there's no way to do that, if you don't do every job in that world. And so, my co founders, and I really learned about all things, logistics, and all things delivery, by doing the deliveries, you know, early on, actually, for the first year and a half, we did every single delivery. And, you know, while while classmates of mine are grad, we're, we're, we're moving on from, you know, grad school, and, you know, taking great vacations, I was shopping homeless for my Honda and

David Novak 11:54 

the literation. From my Honda, that's awesome.

Tony Xu 11:57 

Yeah. And so that's when I really got to understand, you know, how this business works, and how, you know, a delivery is really composed of many different steps. And, and it's the ability to get each step right in the sequencing of each step. And make it really more of a logistics and math problem that you can then apply some of the, you know, things that I studied, whether it's machine learning, or just other applied math techniques, so that you can actually standardize it, make it consistent and deliver high quality of service,

David Novak 12:31 

Tony, it's one thing to have this idea and started to learn how to execute it, but how in the world you get the word out, you know, I come from a marketing background. So, you know, I'm really curious, how did you build awareness of this new company, you're trying to?

Tony Xu 12:45 

Well, early on, we didn't have a lot of means we started the company, you know, with 10s of 1000s of dollars, and we didn't pay ourselves anything, actually, you know, for the first few months. And so we couldn't really, you know, put together any expensive marketing campaigns or anything like this. But one of the insights early on was recognizing that, you know, outside of New York City in America, at least just been no city offered delivery, you know, maybe with the exception of a few Chinese places, and, and pizza restaurants, just about no store offer their own delivery. And so, for us early on, it was we asked ourselves the question, well, what can the restaurants actually get the word out. And I still at the time, had a student ID that worked at Stanford. And I guess they hadn't turned it off or give it you know, denied my my privileges after graduation. But I was able to print lots of just very simple looking flyers that said, the names of restaurants that would offer delivery, and we would, you know, ask the restaurants that we partnered with, if they would put those in their takeout bags. And that was really how we got the word out early, early days. It wasn't a very sophisticated campaign. But it taught us a lot, which was that the restaurants that people could get delivery from was most important.

David Novak 14:17 

That's big time resourceful. Like, do you feel like you I see your ads on national television now all the time? Do you feel like you have that same resourceful mindset today?

Tony Xu 14:27 

Well, it's something that, you know, we think is really important to keep, I think being able to generate a high output input ratio, as I like to say it is is really, really, really important. And so we definitely try our best to do that. And I think, you know, for example, you talked about some of those marketing campaigns DoorDash up until just just a couple of years ago, actually, in the spring of 2018 was what when we started building our marketing teams for the first time, and so we didn't even have a marketing team for the first five years of of life, you know, 70% of our life, we actually didn't have a marketing team, mainly because we couldn't afford one. And so we had a win on building a better product but but the ways in which we've tried to stay resourceful now is really trying to stay close to the customer. So you know, every person in the company still does deliveries every month, we still do customer support. During this pandemic, we had everybody make menus because of the unprecedented amount of inbound merchants who are trying to get onto the platform. So there are still signs that give me hope that we still have that resourcefulness that we had when we started this company out of my apartment. But it's something that I think you're fighting all along the way, as you get more elevated in your position as a company.

David Novak 15:48 

Yeah, I always call that big company itis. You gotta you gotta keep the big company small, which you're obviously trying to do you understand the first day you opened up for business, you only had one, one order. So what were you feeling the morning that you woke up and started that business that day? And then what were you feeling at the end of the day? Well, it

Tony Xu 16:09 

was a lot of excitement, because we didn't expect to get an order. So soon after launch, but you know, we remember every part of that order, certainly, and and obviously, we fulfilled the order ourselves. But even to this day, we remember you know, all the things that the customer said, we remember exactly the route that I took, and etc. But I do also remember that excitement quickly waning. Over the following weeks, as as you know, our order volume hadn't picked up quite as I had hoped, early on. I remember July 4, after we had launched, which is only about a couple of weeks after we had only received six orders that day. And it was just one of those days where we had to quickly look behind us. We fired up the grill, made some burgers for ourselves as the co founders, and then look forward to the next day.

David Novak 17:03 

That's great. It's great to see you definitely persevered through this tough times. You know, Tony, one of the things I know great leaders do and especially great entrepreneurs, is you just have an inherent ability to to solve the most important problems that occur most frequently. How do you go about identifying and solving the problems that you face as a company?

Tony Xu 17:23 

Well, I think there are a couple of mechanisms or principles and then mechanisms built to enhance or enforce those principles. You know, one of them is about this truth seeking nature. You know, I think sometimes when you're an entrepreneur in particular, you get so excited. And you know, I'm an eternal optimist. So sometimes I get, you know, overly excited. But but it's really important to have a truth seeking culture in place, so that you can always look for the disconfirming evidence. And so you know, in the second month of DoorDash, is life, one of the things I did was I taught sequel to all of the non technical people at the company, and gave access to them to the database so that everybody can get the same access to information. And it's still something that we do today, obviously, in much more elevated ways in more sophisticated ways. But it's something that allows data to be at the heart of how we make decisions, and also how to move fast and in a very decentralized way. I think the second principle here that's important is to operate at the lowest level of detail. Most problems, they're not very easy to understand at the surface, that's why they're hard. And sometimes it's hard to prioritize, because you actually don't have enough clarity of what the true root cause behind something is, you hear a lot of anecdotes, you see a lot of the symptoms, but you don't actually yet understand the root cause. And so you have to keep going, you know, lower and lower and lower on this hypothesis tree to really uncover what you're looking for. And so I think there it's about, it's about writing, that's a mechanism we found very, very helpful, which is continuously writing down, you know, what we think the problem is until we can peel it back so that there's nothing left and then actually, then taking those root problems and then prioritizing against them.

David Novak 19:20 

What kind of mindset do you use to approach a new problem?

Tony Xu 19:23 

I think a couple of things. I think the first is really to be very curious about the problem. Because sometimes the problem isn't one that you like, or it isn't one that is you know, great for you but but obviously it's one that's that you have to solve and so for us, you know, we have a saying we like to solve the hardest problems first at the company, and the reason for that is because they tend to be the needle moving problems, but they are the most difficult for that reason. And so you really have to peel back all of the staying curious, I think to the problem is something that I think will continue to pay dividends because those root problems, they tend to be the ones that persist for a while, I think the second thing I would say about approaching problem is you have to be optimistic. You know, and we like to say, to choose optimism, and have a plan. So it's not just being, you know, overly cheery about something, it's about, you know, staying positive about thinking about how you can iteratively make progress, and actually build a walk towards maybe something very big, but you're starting very, very small. And so, you know, I think some of these principles have have been how we've approached some of our most difficult problems,

David Novak 20:41 

the curiosity is, is a great trade. And, you know, just as you talk about that, you know, I'm really curious, how, how in the world, did you scale your business so fast? You know, you, you talked about writing everything down? Was that a big key for you to be able to launch and learn and move and expand and grow?

Tony Xu 21:00 

Well, I think, you know, writing certainly was one of the mechanisms. But I think that, like, you've seen this, you know, to great depths, David, which is, you don't do anything significant alone. And me, me. So the number one thing is the way in which DoorDash is scaled effectively, is because of its people. And I think, you know, when I think of milestones along the way, the first 100 people at the company really set such a strong foundation for the culture that allowed us to scale to the next 1000. And it was the behaviors that led to the success and those people, and both making observations about them, writing them down, and then creating the mechanism to multiply them. That's really what allowed the company to scale.

David Novak 21:47 

Everyone today, Tony talks about the importance of innovation, you know, what are you doing at DoorDash? To not just make this a buzzword and something that you talk about? And what are you really innovating around?

Tony Xu 21:59 

Yeah, well, I think, a couple of thoughts here. One is you got to really understand what the customer is going through, because innovating just for the sake of building great technology that may or may not solve a problem isn't really innovating, you have to, you know, hopefully, make a difference. And I think that starts with truly, truly understanding all of your customers and friends with three different types of audiences with consumers, merchants and drivers. And so it's making sure that we do deliveries to making sure that we work inside restaurants, it's making sure that obviously we ourselves can be consumers of the product. The second thing I would say here is innovation, as you get a little bit bigger, as an organization, is about enabling and empowering a process that wants to say yes, because most organizations as they get bigger, they want to find ways to say no. And I think you almost want to find the shortest way to say yes. And so that, you know, DoorDash, you know, means a few mechanisms. One is decomposing all projects, especially new ideas into small teams, and allowing any team from anywhere in the company to actually ship and trial new ideas. But because they're small, both the team size, therefore the investment required, as well as you know, how we test an experiment. The consequences are also small. And so we can learn very, very, very quickly. And the idea of, you know, making that process, something that will outlive and outlast any one individual or any one leader, is a very, very important one to get right. And it's one that we're still trying to figure out how to get right at bigger scale,

David Novak 23:52 

from my old delivery days of Pizza Hut, you know, and by the way, did we miss a big opportunity, we should have been the food distribution company instead of the pizza company. But anyway, you you beat beat us lot smarter than me, we really, you know, we're always focused on hot and fresh, are you innovating around that? Yeah, it's very important

Tony Xu 24:08 

to to get right. And you know, when I think of the dimensions of what makes this service successful qualities is number one, in terms of whether or not someone, a customer is going to enjoy their experience and come back and use your service again. And so for us, you know, minimizing the waiting time, if you will, of how long foods sits out there or how long food travels, those are important parts of the delivery experience that we work very, very hard at in terms of, you know, trying to do things around the food itself or the heating or the cooling. We haven't done that much right now. Most of what we've done is making sure that we minimize any delays and that we make sure that there is packaging to keep Keep the food hot if it's meant to be hot and to keep the food cold. In the case of ice cream, or, you know, other perishables if it needs to be cold.

David Novak 25:09 

Tony, as I listened to you and studied a little bit about what you've done, you're kind of like a modern day, Sam, Sam Walton, in the sense that, you know, you talk about SQL, because you wanted everybody to understand, you know, what the business and have access to the information. You know, Sam Walton used to say, the more you know, the more you care, you know, when he expanded, he went to C and D counties, he went to small town America, he didn't go into the major cities, and I look at you, and you've taken some of his characteristics and traits. And then you've also deviated a little bit, you know, you start out in San Francisco, you didn't go to small town America, but you went to Boston as your next market, as I understand it, you know. And so you obviously had a strategy there, that was something that you needed to have to compete. But I'm curious, why did you go from San Francisco to Boston, bad weather, lots of traffic? Seems like the worst place in the world could possibly go as your next market.

Tony Xu 26:06 

Yeah. So we did have one more California market before, before Boston, which was Los Angeles. But But yeah, the reason it goes back to one of the things we talked about earlier, which is solving the hardest problem first, and one of the problems we wanted to solve was, we wanted to find a market that had bad weather that didn't rely as much on cars, as it did maybe other modes of transport, like bicycles, a market that would challenges with timezones, which obviously, Boston did, and that's actually why we chose Boston. And, and so for us, it was, we certainly had, you know, a list of criteria of how we chose markets and the sequencing of those markets. But one of the reasons why we wanted to choose Boston at the time that we did was to make sure that we could solve the hardest problem first.

David Novak 26:55 

That's great, I think about your problem, and I'm a novice. So just looking at it here. But you know, one of the big challenges in delivery is always the additional costs it takes to get the meals delivered at home. And, you know, I know your customer base has to skew to higher incomes, at least I would bet it would. Is that okay? For you, as you think about the future, or you really have a big push to make your delivery service even more affordable for the masses, our goals from

Tony Xu 27:23 

from day one, was to make sure that our product would be accessible to everybody. And, and it's a big part. And so, you know, while we started in a lot of these more metro areas, and actually, we tended to start in the suburbs, a lot of these metro areas DoorDash today is principally in it's really everywhere, and and it's really a representation of what the country looks like across all income levels, and all demographics. And so for us, it's never been more important, especially now, I mean, during this pandemic, as well, as you know, after this pandemic, that we make sure that our service is accessible to everybody.

David Novak 28:10 

You know, value is such a huge challenge. You know, when you think about it, I always used to say, you know, you're really trying to be price competitive with a process that entails a human being a 3000 pound machine, okay, and you're delivering two pounds of food, what, you know, I mean, that's a daunting task, how do you really solve that problem? How much resource do you put against it

Tony Xu 28:32 

in logistics is really at the heart of everything we do. And I mean, that in the, I guess, more limited vernacular of the last mile problem. And then just more broadly, frankly, in every problem that we see, which is, how do you take a problem, decompose it into its component parts, decompose its component parts into, you know, the root level, operationally solve each one of those root challenges, and then actually build software to productize. That at scale, you know, that really is the rough manner in which we think about product development. And that's how we understood the logistics game itself, by doing every single delivery ourselves. That was how we figured out that there are, you know, at least 20 steps into delivery, and you got to get all of them, right. And it isn't, it sounds trivial when you think about getting a burrito delivered or something like this. But there's a lot that goes on, and a lot goes on, because we're talking about the physical world. And there are real, like you said, atoms that are being touched that have to, you know, move in a certain set of ways so that we can make that work.

David Novak 29:43 

You know, how would you describe your team members? Tony, you know, people you call the Dashers. And what kind of culture are you trying to create for them? You mentioned some of the things you were doing earlier? Yeah,

Tony Xu 29:54 

well, Dashers you know, I think it starts by understanding who these folks are. So they're there. They're independent contractors on our platform. And they, the number one thing that they value is really the flexibility that we offer. So 90% of them actually work fewer than three hours a week. And so if you think about, you know, this community, it's really a great I think representation of how work is changing in America, and frankly, globally, which is, you know, work should be flexible work should happen, aware of wants to happen whenever it wants to happen. And that, obviously, challenges and some of the traditional paradigms of how we think about work. But that's really the number one thing that we think about protecting, which is this flexibility, especially as we think about going beyond serving restaurants as we think about serving different types of deliveries, and different types of activities. And so I think that's the first part, the second part is making sure that this group gets the protections that they deserve. And so, you know, I talked about some of this earlier in this conversation of where we wanted to make sure, especially during this pandemic, that you know, they have access to the same personal protective equipment that others should have access to non medical grade, you know, PPE, but the protections that they deserve, making sure that they have financial assistance, if they, unfortunately, were to be impacted by, you know, COVID, 19, and making sure that they get access to the same telemedicine and diagnostics that, you know, I think other patients do. So I think it's making sure that as we scale this group, that they get to keep the flexibility they want while getting the protections they deserve.

David Novak 31:45 

Well, how do you motivate a gig worker who has three hours a week time committed to you? I mean, I tell you what I'm in I've always tried to have a highly charged workforce that's got to be that's got to be a huge, huge challenge.

Tony Xu 31:58 

Yeah. Yeah. Well, the way I think about it is how do you solve for what the worker wants, and that and that's truly how I think about, you know, motivation, which is, you know, and for some workers, that means just this one task, that's how you can motivate me. For others, it means, you know, different things. And so I think just with all things, there is no one size fits all answer. There is no silver bullet, so to speak, otherwise, it wouldn't be a fun leadership, challenge and opportunity. And so I think for us, it's thinking about for each Dasher, that we have the privilege department within our platform, how do we make it worth their while, during the time that they actually on with us? And for some, that means certain things that for others, it's a very different things?

David Novak 32:55 

You know, when you think about your company culture itself, what would be the top three behaviors you're really trying to drive? Yeah, I

Tony Xu 33:02 

think the first is really this one around the ownership mentality, I think when you talk to people at our company, that's probably the one that folks would point to the most. And this ownership mentality means you, there is no true job description, you know, your goal is to help the company succeed. And and, sure, that means that you have a certain set of things that define maybe the role but you know, it means during this pandemic, that we're we're out helping Dashers, and we're out helping the community, it means that we're we're making menus as as a company together. And that's what it takes, regardless of what your actual job title is. I think the second is really one around a strong bias for action. You know, I think one of the things that I've come to learn about business, and certainly, I think this pandemic is a very pronounced version of this, you can't predict the future. And the best way to predict the future is to try your best to influence it by making some of the future and I think, in order to do that, you have to take action, which means you're going to make mistakes, which means that you're not going to get every shot, you know, correct. But you have to take those shots and that doing something and then learning very quickly from it is actually how you get through anything. And I would say the final one is this notion of getting 1% better every day, that regardless of you know, whatever milestone we've been able to achieve, that we're never finished that we're only as good as our next delivery. And, and it's a very humbling business, you know, and it's also one in which we get to see sometimes the best of humanity. You know, I can tell you about so many stories just during the last couple of weeks of how If there would be Dashers, who want to donate time to deliver meals, you know, from those who can donate them to children, or to the elderly, who really need them. Or, you know, I could tell you about local businesses who are opening up as a way not just to stay in business for themselves, but they're actually in a time of need, donating 1000s of meals, sometimes to health care workers that are serving the community. I mean, it's incredible, I think some of the human stories we get to see every single day. And that's what gives us also, I think, the sense of humility and inspiration, to keep learning ourselves and to always try to do better.

David Novak 35:46 

That's fantastic. I love the 1% better every day, that sort of like getting a capitalized IQ rate go for you. You know, when you think about you talked about mistakes, and when you look back on your own personal leadership, everybody has an epic fail or some failure that really taught them the most, what would be yours?

Tony Xu 36:09 

I think the biggest mistakes I've made have almost always been around people topics, you know, and not getting those right, frankly. Because at those times, I was still developing as a leader, you know, and I think I can think of a couple of different versions of this, you know, one version of this is, how do you actually make sure that you bring in the right leaders to your organization. You know, DoorDash is a company that, as I mentioned before, it's not a one person show, it's a company that's being built now by 2500. People and, and that's actually how you go on and do great things. And the leaders that you bring into an organization like that really matter, and because they influenced so many more people than than just when you started the company. But I think sometimes when you're hiring leaders for the first time, like when I look back, at my own hiring journey, you don't always get it right, because you don't even know what type of problem you're trying to solve. Number two, you also may not, you know, I was not looking enough at what the actual superpowers of some of the leaders we brought in were. And maybe while they were great. They weren't necessarily a fit for either the culture or the problem that we're asking them to solve. And I think whenever you match, a leader that is phenomenal in their own right to the wrong problem, you don't always get the best outcome. You know, that's one type of one category of learnings. I think the second for me, is really around, making sure that I don't confuse when what I say with what I want to get done, and to not let what I want to say get in the way of what I want to accomplish. And I think when you think about your influence, as a leader, especially as you get as your organization grows, your words carry a lot more weight and power almost exponentially, you know, versus you know, just your team or headcount growth. And so, for me, it's been about the times where I didn't live up to, you know, the best leader that I could be were when I didn't think enough about the different hats that a CEO should be wearing. And that maybe not everyone has the same context that I do, or maybe that it's a new hire. And it's and it's their first meeting with someone like me in the company. And I didn't come off, you know, in the best way. And I think that's the second category of lessons. But both of them are really around, you know, people, I think the first is making sure that how do you make sure that whoever you bring in, and the problem you're asking them to solve really fits with what makes them naturally tick. And then number two, that you always think about how you're going to show up, and and how you always want to make positive deposits in your relationship building with others before you start asking for any withdrawals anytime soon. And so I think those are probably the two biggest areas that, you know, I've thought a lot about over the past few years.

David Novak 39:39 

Tony, I know one of the things that you've had the take a little criticism on a spin like the transparency of your tipping policy, what did you learn from that experience?

Tony Xu 39:50 

No, I think that one of the things I've learned is about, frankly, any big challenge at DoorDash is you got to get it right for everyone. Yes, you gotta get rewrite for consumers, you got to get a right for drivers, you got to get a right for merchants. And in the example of, you know, the pay model that you bring up, you know, we were squarely thinking about how to get it right for drivers, and how to make sure that every delivery was worth doing. And that it's not just that the deliveries that had high tips would be worth doing. But also the deliveries that were low tips where we would effectively subsidize and pay more that they would be worth doing as well. While it was very positive to the driver community, it wasn't very positive to the consumers. And what I learned there was you have to get an MRI for every audience, and that there is there's really no, there's no substitute for that. And, and so that was why we decided to make that change.

David Novak 40:49 

Yeah, that's great. You know, I mean, we've all we've all had those things happen. It's but it's how you recover, that really makes a difference. And I loved seeing what you're doing from just a driver perspective, particularly now what's going on with COVID-19? So hats off with what you're doing with the Dashers. I love where you're headed there. You know, when you think about competition, how does it spur you on? How do you view competition? For example, one of the things I was thinking about, you've got right now you've got all these restaurants out there, doing curbside carry out, you know that everybody's learning that process? And that technique is, is that something that you think's going to impact your business down the road? Or how do you look at that dynamic?

Tony Xu 41:31 

Yeah, I guess the way I've always thought about this is, you got to start with what it is that the customer wants, and always kind of squarely keep your attention there. And then you got to think about, you know, what are the things that you're going to uniquely do that's gonna overlap well with what the customer wants, and, and the rest will take care of itself, because the rest, frankly, is out of your control. And you can only focus on what you can control. And so at least the way that I've thought about it, is to make sure that from day one, when we were doing all of the deliveries, doing all of the support, that we understood exactly what the needs of those customers were, and from there, just keep getting better in that process. And I think that different competitors will come and go, that's one of the things I've observed, frankly, about any industry, ours is there's been no exception to that. And I think it's about, you know, winning on the product. And and that only comes if you have a very deep understanding of the customer.

David Novak 42:40 

I noticed now that you're you've also developed this partnership with Walmart, and you're doing grocery store deliveries as well, you know, what's your future back? Where do you see all this going? In the end? What's DoorDash, five years from now?

Tony Xu 42:54 

Well, DoorDash is goal, again, is to empower local economies. And what we mean by that is, we want to make sure that the businesses on the streets, whether they're small businesses, medium sized businesses, or bigger businesses, that they all can make it. And I think the biggest economic transformation of our time right now, again, even prior to COVID-19, was how do you do business, in a world where customers aren't walking inside your stores. And so DoorDash, his goal is to serve all of these businesses, you know, restaurants or other types of stores, and make sure that they actually have a convenience arm that allows them to compete in the modern day era, and to make sure that we can do that know, through our products as well as their own so that the merchants can feel empowered to actually do a lot of the things you're talking about. But But I think that's going to take decades. You know, I don't think that is a transformation that happens overnight. And it's something that takes an understanding of a new way of doing business way of embracing I think the future and where consumers are, as well as recognizing that if merchants can actually make this jump, then they'll be able to have the opportunity to build those in store experiences, once again, that may look different from from today or from the past, where customers will want to return again to their stores. So I'm optimistic that if merchants can figure out this convenience component, which is which is here to stay and has been here for a while, that they will be able to then reinvest back into their stores. And it'll look very, very different from the past, but people will start wanting to walk inside their stores again.

David Novak 44:39 

Tony, what do you mean by the last mile the last mile logistics?

Tony Xu 44:44 

Well, today, there is no way to get everything inside your city brought to you in minutes, not hours, not days. And there are lots of reasons for this. And there's lots of components necessary to solve that problem. Our goal at DoorDash As to as to enable all of that to happen. And some of that will happen to us, some of that will happen to the stores themselves. But that's really what it means it means to allow the businesses inside their city to have the relationships that I think they want with the consumers that live near them,

David Novak 45:20 

shifting the way back a little gear, shifting some gears here and going way back, you know, I know you, you worked at McKinsey as a, as a business analyst, you were a strategic consultant at eBay and PayPal, and you worked for RedLaser. You know, what did you learn to do? And not to do from those experiences when you thought about starting your own company, and building the company that you have? Now? I know, that's a broad question. But is there one or two things?

Tony Xu 45:46 

Yeah, I think those experiences were helpful. Certainly, I think started look probably more things growing up as a kid prepared me to start a company than then than anything else. But I would say a couple things I took away from some of the experiences that you outlined. I think one is just how do you structurally solve a problem over and again, and and I think, you know, McKinsey was a really great introductory environment for me, especially when it came to looking at business problems. Because my background prior to that, it was really looking at science problems and math problems, you know, I was training to be a cancer researcher, and prior to McKinsey, and so that's a very different world. But the way in which you approach problem solving actually share I think, a lot of common philosophies and I think McKenzie was a very helpful way to almost give me a new language to understand, you know, what business really was about. And that was a, it was a great foundation, I think, you know, the other experiences that you listen, really were my first introduction of working inside of a company. And some of them were big, or companies like eBay and Pay Pal and others were smaller, like, like red laser. And I think it gave me numb the first taste of what it means to actually operate, be responsible for, you know, a number, or a small team. And, you know, some of the careers of other of others. And so, I think that was very helpful in just making sure that I had a sense of what that meant. But, again, you that's not a replacement for something that you do day in and day out for the last seven years that I've been doing. DoorDash. And so, but both of those experiences, I think they did share one commonality, which is, I've made my biggest decisions in life really around the motto of where am I going to have the most fun and the least regret. And that tends to be true, around the around great people, that the people tend to make the difference of where am I going to have the most fun and the least regret, you know, and I look at those, those different organizations that I've been privileged to get to work at. And it's really the people then, you know, made some of those lessons stick for me moreso than the circumstance

David Novak 48:10 

speaking to people. What's the most important thing you look for when you want to hire somebody?

Tony Xu 48:15 

Yeah, well, well, there are there are a few, I started writing down, I think some of the best behaviors of the best people I've observed. And I call them the attributes of excellence. And one of those behaviors is really the ability to operate at the lowest level of detail. And I think for a business like ours, it's very, very critical to get right. And I think, especially as leaders grow in their careers, sometimes that's a skill that they they get further and further removed from. The second is having the courage to have a strong bias for action, because that means you're going to make mistakes. You know, the third is the ability to recruit people better than yourself. The fourth for me is having strong followership. And that to me really is the definition of leadership. It's not how many direct reports you've been given to oversee, it's really how many people want to follow you. And that's why I believe there are many leaders even within DoorDash that have no direct reports. Fifth is the ability to hold two opposing views at the same time. I think that's very, very hard to do, especially, you know, as people we want our side to be right. And I think the final thing is ending as a hallmark of our culture, which is this 1% better every day mentality, this growth mindset to never settle. To always look for the next milestone.

David Novak 49:41 

You talk about courage. I read where you You made this bold move and you acquired Scotty Labs, which is a self driving car company, as I understand it, how do you muster up the courage to do this? And it's obviously a long term move. I would think Okay, you know, what do you see as the future benefit of that?

Tony Xu 50:03 

Well, there are different horizons into investments. And that I think about, you know, that's true for people investments, that's true for, you know, acquisitions as you talk about true for product decisions, marketing decisions, etc. And, and, you know, one of the things that I think as a leader, you have to make sure you get right is that you can't miss the future. And the hard part about missing the future is you don't exactly know when it's going to come. You know, some believe that it's already here, it's just not evenly distributed. Others believe it's never coming. And and I think, you know, the pundits always sound really smart. But but when you're, when you're in the hot seat, so to speak, you have to, you have to take the point of view. And and from, you know, where I sit, there's no doubt in my mind that we would live in a safer world and a higher quality world, if autonomous technologies, were here to help us. And to me, it's really about, you know, how do you get that marriage right, of when I look at something that we do, and and I think autonomous technologies can help in a lot of applications. But when I look at what we do, how do you make sure that they can help solve some of the problems and that they cause delays or waste in our system that that humans don't want to do that Dashers don't want to do? So then humans and nationals can do more higher value or more desirable things? And how do you get that equation, right? But you got to start somewhere. And to me, that typically starts with betting on the right team, and making sure that, you know, we could bring on a group that is dedicated, and committed to a cause that they know is multi years, perhaps multi decade. And it's not something that's going to get solved tomorrow or overnight, or even in a year. And so that's typically how I think about the longer term things. Oh, that's great.

David Novak 52:04 

You know, Tony, this has been so much fun, and, and I want to have a little more fun. I've just started doing this with my son my conversations, but I want to do a quick lightning round, okay, of questions and get to know you a little better here. Okay. What would be the three words that best describe you?

Tony Xu 52:23 

Fast? high bar?

David Novak 52:29 

What's your biggest pet peeve?

Tony Xu 52:33 

My biggest pet peeve. People who don't hold themselves accountable?

David Novak 52:39 

I thought you're gonna say they're not fast, and they don't have a high bar. If you could trade places with someone for a day, who would it be? And why?

Tony Xu 52:47 

Hmm, I think I would probably trade. I actually don't know who the most recent astronaut class is. But I probably would think about trading places with someone who either is currently in space or is about to make their you know, journey into space. I think as a kid growing up in the Midwest, the son to a person who literally studied rocket science, I've always been fascinated by, you know, what's what's on the horizon? Literally. And, and I think seeing the world from a completely different perspective.

David Novak 53:24 

What's a random fact I don't even at that few people would know.

Tony Xu 53:28 

I don't think most people know that I came up with my name. So when I was five, and I moved to the US, no one can pronounce my Chinese name shushing. And as a result of that, and getting, I think, a bit frustrated by that fact. When I was five, I walked with my dad to the immigration office and legally changed my name to Tony. And that happened because I used to watch a lot of TV as a way to learn English, and I watch a lot of who's the boss starring Tony Danza?

David Novak 54:00 

That's great. Do you have any hidden talents?

Tony Xu 54:05 

I don't think so. I think my wife made say one of my hidden talents is how fast I write emails. But I hope that's

David Novak 54:15 

your fast, there's no question about that. What three bits of advice Dhoni would you give to aspiring leaders?

Tony Xu 54:22 

I think the first is, you have to know yourself before you want to lead others and that while it's easy to try to learn from others and be inspired by others, first and foremost, if you don't know your own strengths, and therefore the vulnerabilities of sometimes overplaying to that strength, it's going to be very difficult to lead in a very authentic way. And at some point, you may not find that enjoyable. So I think number one is being proud of the person in the mirror. All the good, all the bad and everything in between. You know, I think the second thing about leadership I would say is Leadership is about followership. It's not about how many people reporting to you, or so that means you can lead at all levels, whether you are an intern that joins for the summer, or whether you run a big organization yourself. And I think it's in the behaviors that you exhibits that ultimately drive those of want to follow you not necessarily, you know, where you sit in an organizational chart, the final thing I would say about leadership is you have to know the business. That's true for anything you do. And when I say no to business, that could be true in a for profit context, and a nonprofit context and the science context, etc. But I do think that leaders over time, not necessarily every single time but over time, are judged by whether or not they are right. And almost by the magnitude of how right they they get. And I think that the only way to keep yourself honest, I think, to keep yourself also humble, is to stay very close to the problems and to really be able to operate at the lowest level of detail.

David Novak 56:18 

Tony, I really want to thank you for opening up your home to be with this zoom call that we have going on right here. And you know, in the background, I've heard your child every now and then I don't know if our listeners will pick this up. But you know, it's having a little fun make it's boys back there, which is really a beautiful, beautiful sound. But you know, how do you how do you balance you know, running this, you know, multibillion dollar company with with the, with your, the wife, you obviously love in the family that you have.

Tony Xu 56:48 

There's no easy answer. But But I think for me, it's about finding routines and and making sure that I stick to those routines. And so it means having breakfast with my daughter, you know, even actually, even before this podcast, making sure that I would make breakfast for my daughter and have breakfast with her. And means making sure that there's date night with my wife every Friday, regardless of the circumstance, making sure that I go on, I used to be an avid runner, I jog occasionally now, but it's making sure that I still do that, you know, for myself. But whatever those routines are there, again, there is no easy way to integrate work and, and life and back in. But but you got to stick to those routines and be confident that both for yourself and those around you to stay true to your commitments.

David Novak 57:40 

One of the reasons why I love conversations like this is I get inspired, that I get inspired by great leaders. And I get inspired by people who just keep wanting to get better and better and have that learning mentality that you have. And I want to thank you so much for taking the time to spend this time with us. Thank you very much. Thanks, David.

Tony Xu 57:58 

It was great chatting with you.

David Novak 58:09 

Well, can you imagine day one on your job, and you're learning a database language. It's the perfect example of how Tony really embraces the nitty gritty stuff of his business. He knows those tiny little details, and he knows that they're the secret to solving big problems. Some leaders hate to get into the weeds. Tony's the exact opposite. He learns by doing. Tony and his team break down problems into smaller pieces, like knowing the 20 exact steps that go into every delivery. And Tony has done every single step himself. I just love that curiosity and tenacity to really get clear on the problem. So I gotta ask you, does your business have a persistent problem? I think we've all been up against the problem. We can't crack no matter how many times we try. Sometimes problems persist. Because we haven't really gotten clear on the problem itself. We may be lacking some information about what it is that we can only find if we get into the details. All right. It's time for me to give you a little coaching this week as part of your weekly personal development plan. Get curious about a problem. Talk to the team members who really deal with it. dig into the data, get on the phone with the customer who's experienced it, try to break it down into smaller details like Tony, whatever the equivalent of Slean have us out of a hunt is for you. Get out there and do it. When you get curious and tenacious about the details your team will do. And it's going to feel so great when you finally find that breakthrough solution together. So do you want to know how leaders lead what we learned today? As the great leaders break down problems into detailed pieces, thanks again for tuning in to another episode of how leaders lead where every Thursday you get to listen in. While I interview some of the very best leaders in the world, I make it a point to give you something simple on each episode that you can apply to your business so that you will become the best leader you can be