This week, food delivery giant DoorDash went public, seeing its share price skyrocket to $189 within days. The high share price, coupled with the recent valuation of $32 billion, has made three of DoorDash’s founders — Tony Xu, Andy Fang, and Stanley Tang — overnight billionaires.
DoorDash’s fourth co-founder, however, is largely overlooked. Evan Moore, who attended Stanford with Xu, Fang, and Tang, left the company after only 17 months. Despite his short tenure, Moore helped create the biggest food delivery company in the US, even serving as one of the original “dashers,” or delivery drivers, before the startup had a staff.
In recent Twitter threads, Moore and Xu each gave their own experiences founding DoorDash. According to them, it all started in late 2012, in a Palo Alto macaroon shop. While looking for a startup idea relating to local businesses, Moore and Xu began interviewing business owners to discover their pain points and what services they were lacking.
“We were wrapping up an interview when we overheard the manager turn down a delivery order,” Moore tweeted. “If there was a lightbulb moment, this was it - why couldn't businesses send things across town, on-demand? There should be an on-demand Fedex!”
That was when the two of them hit upon the idea of a delivery service for local restaurants — most restaurants in the area didn’t deliver, and the ones that did told Xu and Moore that delivery was their biggest headache. The two brought in Andy Fang, an undergraduate in Stanford’s computer science program, who then brought in his classmate Stanley Tang. Together, the four of them realized a viable business model could be possible.
“The most important hypothesis, for this to work, was that excess consumer demand existed,” Moore wrote. “We'd also have to prove out the labor economics for delivery, and that restaurants would be open to delivery. But consumer demand was clearly the driver that would convince restaurants.”
Looking back, Moore said there was no magic recipe to their success — just hard work and a focus on growth. “You'll hear people say the team was obviously impressive, or they had conviction in the vision, but we were not special, it was not a hot space, and no one thought it made sense at first,” Moore wrote. “Starting from the belief that we had to ‘earn every inch,’ as Tony often said, was integral.”
Do things that don’t scale
The founders’ first step, wrote Moore, was to set up a website, dubbing their service Palo Alto Delivery. The site included a Google voice number and menus from local restaurants. The delivery fee, the business’s sole revenue, was $6. Within hours, the first order came in, for Thai food delivery. Moore then drove to the restaurant, picked up his takeout order, and delivered it to Palo Alto Delivery’s first customer.
“We quickly had trouble keeping up,” Moore wrote. “I remember running out of class to answer the phone more than a few times. We started hiring others to help us deliver, from craigslist, flyers, and by ordering pizza and hiring that driver on the spot.”
According to Moore, the founders took Y Combinator founder Paul Graham’s famous piece of advice to heart. “We probably took ‘do things that don't scale’ too far. It was absurd. But there was a major upside to doing so many orders ourselves: we understand the details.”
Do all the things
Once Palo Alto Delivery was making profit, the founders applied to famed startup accelerator Y Combinator, just six months after starting their business. They got accepted, but not without a bit of skepticism from Paul Buchheit, the creator of Gmail and YC partner who reviewed founder applications. According to Buchheit, they had only made 217 deliveries, and didn’t even have an app. It took months for Buchheit’s skepticism to dissipate as he watched the business grow.
“One of our most memorable lessons from YC was "do all the things." We came with a list of 20 ideas for how to grow, and asked the YC partners which to prioritize. I think it was @paultoo who said something like ‘How would I know? Do all the things.’”
The founders went on to buy a house to use as a kind of giant home office. At one point, 15 people were working from a two-bedroom apartment.
“When one of our first employees arrived for her first day, Tony was sleeping on the floor of the apartment,” Moore wrote. “I tried to quickly deflate and hide the air mattress while he distracted her out front. We wanted to seem like a real company. I'm sure we did not.”
Y Combinator and Buchheit were a strong presence in DoorDash’s development, even after the three-month program was over. The founders were invited to speak at events, and YC helped DoorDash raise its Series A and C through the YC Continuity fund. By 2016, the company was firmly established in the food delivery industry.
A commitment to dashers
One of DoorDash’s keys to success, according to its founders, was prioritizing both merchants and dashers, and not just customers, as Uber Eats and Seamless had done. In his thread, Moore called it an “on-demand model with three sides.”
Tony Xu also tweeted in honor of DoorDash’s IPO, announcing that the first investment from the company’s debut will go to merchants and dashers. Xu announced last month that DoorDash would invest $200 million in local businesses as part of its Main Street Strong initiative.
“We founded @DoorDash with the mission of growing and empowering local economies,” Xu wrote. “While our business will change often, one thing is constant. We wouldn’t be here without the tireless work, partnership and trust from our Employees, Merchants, Dashers, and Consumers.”
Despite the recent investment, and bonuses to the most active dashers on the app, dashers in California are paid an average of $26,423 a year, equating to $12.70 per hour, less than California’s 2021 minimum wage of $14 per hour for large businesses, according to ZipRecruiter. Tony Xu’s net worth, meanwhile, has risen to $3.1 billion after the IPO. Fang and Tang’s net worths are around $2.8 billion.
Although Moore only worked with his co-founders for less than half a year, he helped set up the top dog in the food delivery wars. He didn’t do so badly for himself, either. Moore went on to work as head of product at real estate startup Opendoor. Today, he’s an investing partner at venture capital firm Khosla Ventures.
