Doordash is a fast-growing tech startup that launched in Palo Alto offering on-demand local food delivery. The company is giving other household name competitors like Uber Eats and Postmates a run for their money and is now valued at over $12 billion.
The crazy thing about Doordash’s story is how they began. Yes, the startup did go through the popular Y-Combinator accelerator program, but well before this, the founders started with a very simple low-code MVP.
In fact, the founders came across the idea for Doordash while trying to validate a completely different business idea. They’d made the classic founder mistake of spending heaps of time designing and building an app, and were now trying to convince local Palo Alto businesses to use it.
Stanley Tang would later recount trying (and failing) to convince one particular local store manager on why she should use their app. They were turning to leave the store when the manager burst out, “Well, there is one thing I wanted to show you.” She had picked up a large stack of pages containing delivery orders. “This drives me crazy. I have no drivers to fulfill them and I’m the one doing all of it.”
Seeing the visible frustration, the students suddenly knew it was time to throw away their current app and solve the real problem they saw in front of them.
They went back to the previous business and asked them about order deliveries. Sure enough, it was a common problem for businesses, but one that was complicated for them to solve.
Start with a ‘Just Enough’ Solution
Learning from their previous mistakes, the Stanford students decided to avoid the temptation to spend months building a polished app.
Instead, they decided to start with a Concierge MVP. They put together a basic website explaining their service, and added a bunch of PDFs from local Palo Alto cafes and restaurants (which they found on the Internet).
Their first website didn’t have an online booking process – customers would have to call a phone number on the website (which was actually just one of the founder’s mobile phones).
There was no fancy dispatch system or any sort of backend for that matter.
Nor did they go out and recruit any drivers – they simply listed times when they could make the deliveries themselves (whenever they weren’t sitting in lectures).
In fact, they didn’t even talk to the cafes and restaurants they had put on the website.
With such a simple, “duct tape” version of their product, they called their startup ‘PaloAltoDelivery.com’ and the website went live.
They waited for several days for their first order, which eventually came from someone searching on Google for ‘palo alto delivery’. This random guy they didn’t know, called their cell phone to order Thai food.
All four of the founders hopped in their car together and made the first delivery themselves.
After that, the site slowly got traction, especially on their college campus. They started getting several orders a day, and word of mouth would increase the demand even further.
“…at the beginning we were the delivery drivers. We would go to class, and then after we would go deliver food. We were the customer support; you know I sometimes had to take phone calls during lectures. We spent afternoons just going down University Avenue just passing out flyers trying to promote DoorDash. We didn’t have any dispatch system so what we had to do was use Square to charge all of our customers. We used a Google Doc to keep track of our orders. We used Apple’s Find My Friends to keep track of where all of our drivers were.”
– Stanley Tang, Co-Founder of DoorDash
After proving that there was a big enough need, the founders eventually rebranded from PaloAltoDelivery.com to DoorDash and started to convert all their manual processes into an automated solution.
This involved engineering their own dispatch system and designing an app for consumers as well as an app for drivers to fulfill orders. As the startup grew they also needed to create algorithms to solve the complicated math needed to match demand with supply more efficiently.
Creating the software behind DoorDash was a lengthy and expensive process but it was also a low-risk decision because they’d already proved that their business model worked.
The company has since raised $1.4 billion over 8 rounds of funding and hires hundreds of programmers.
What is the low-code version of your startup idea?
When you stumble upon what appears to be a lucrative idea for a new website or app, it’s tempting to jump all in and build everything from the start (that’s what the DoorDash founders did with their previous idea).
You can save a lot of time and money, and learn just as much, by starting with a solution that won’t scale.
Create a professional front-end with a website or app that cleanly presents your offering. When someone actually makes an order (or makes a request for whatever your product does) everything is actually fulfilled manually.
Nowadays there are lots of services you can hook into to create a low-code version. Products such as Zapier, Google Sheets and chatbots allow you to give customers the experience of a software product without months of development time and costs.
Similar to the case of DoorDash, the customer doesn’t need to know how much or how little is automated. Whether it’s code or humans doing the work, all the users will care about is the result.
Start small and test quickly. Most decisions at your startup are reversible, so optimize for speed of execution and learning.
– Tony Xu, Co-founder and CEO of DoorDash
The goal is to learn from your customers (or lack of them!) and test whether the business model will work before you invest in a fully automated software solution.
Will it be easy to market your product? Is there a price point that makes it viable for both sides? Can you get repeat customers?
Getting real data instead of relying on assumptions, or focus group questionnaires, is the best way to decide whether you should invest in developing the full product. It will also make a much more compelling case if you decide to later seek investment.
Article written by
- Co-founder and Investor
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