7 ms·

DoorDash Raises $40M, Led by Kleiner Perkins Caufield and Byers

60 points by stanleytang 12y ago

jasondc 12y ago
In Palo Alto, there are DoorDash workers EVERYWHERE. Literally every restaurant you go into you see a bunch of people in red shirts picking up meals. I'm curious how this will do in other parts of the country.
7Figures2Commas 12y ago
It's interesting to see investors continue to pour lots of money into startups that classify their workers as independent contractors even though the risks of doing so are clear, immediate and growing[1][2]. The lines between employee and independent contractor are somewhat blurred in some cases, but given how important the cost shifting is to the economic viability of many of these companies, a lot of these investments are damn near binary. That's fine when you're investing a few hundred thousand or even a few million but not at all necessary in today's market when you're investing $40 million. In this case, it's also somewhat ironic that Kleiner Perkins is the lead investor. [1] http://www.latimes.com/business/technology/la-fi-tn-uber-lyft-class-action-2015-03-12-story.html http://www.latimes.com/business/technology/la-fi-tn-uber-lyf... [2] http://time.com/3748438/instacart-lawsuit/ http://time.com/3748438/instacart-lawsuit/
- deleted 12y ago
  [deleted]
- andy318 12y ago
  Yup. The new bus service in SF - http://rideleap.com http://rideleap.com - classifies the bus drivers as independents. From their ToS (excuse the all caps) https://app.leaptransit.com/webterms https://app.leaptransit.com/webterms - LEAP DOES NOT PROVIDE TRANSPORTATION SERVICES, AND LEAP IS NOT A TRANSPORTATION CARRIER. IT IS UP TO THE DRIVER OR VEHICLE OPERATOR TO OFFER TRANSPORTATION SERVICES WHICH MAY BE ARRANGED THROUGH USE OF THE SERVICES
  - 7Figures2Commas 12y ago
    Hilarious. That's like United saying, "We aren't an airline. It's up to the pilot to offer a flight which may be arranged through united.com."
downandout 12y ago
Wow what a crowded space. This reminds me of the daily deals site era, but at least then there was some room to compete because there wasn't a $40 billion behemoth waiting to crush them. I suspect that at whatever point Uber Logistics (or whatever they choose to call this inevitable extension of their service) takes flight, DoorDash and its $40 million will quickly vanish. This definitely isn't a space I would be doing a startup or investing in at this point.
- WhitneyLand 12y ago
  I share your opinion, but I would have passed on a Twitter seed round so what do I know. What would really be interesting is to understand why so many smart and experienced people have the exact opposite opinion.
  - downandout 12y ago
    The only reason that Twitter is successful is because it was embraced by celebrities very early. I would have passed at the seed round stage as well, but that's because no one could have predicted the celebrity embrace of such a service. The reality is that they, along with most other startups, got seed funding not because of the idea but because of the pedigree of the founders. I suspect there is some of that going on here as well. They are all current/former Stanford students and have been involved in successful companies. According to Crunchbase: DoorDash was founded by four Stanford students: Evan Charles Moore worked on the founding team of Vevo; Tony Xu was at Square and Red Laser/eBay; and Andy Fang and Stanley Tang spent a summer together at Facebook. Moore and Xu were friends in Stanford's business school, and Fang and Tang are undergrads. Same deal with Larry and Sergey, Mark Zuckerberg, Evan Spiegel, and most others. They weren't merely college students; they were Ivy League students. As much as people say college doesn't matter anymore, the evidence says otherwise. We'll probably never know if entrepreneurs from lower-tier and public universities can succeed at an equal rate, because they won't be given the funding to try.
    - harryh 12y ago
      Celebrities didn't embrace twitter for three years after it was launched. That counts as "very early"?
bkjelden 12y ago
My wife and I used DoorDash pretty extensively when we first moved to the bay area, we were living out of a hotel for a few weeks. It was interesting how our reactions to the site differed. I was just happy to have a one-stop list of delivery restaurants with no phone calls, no complicated payment info, etc. Her reaction was "There's no pictures! I just want someone to tell me what I want to eat!" Now, whenever I go to their homepage I see a huge missed opportunity to sell advertising. As sites like DoorDash become well-known hubs for the logistics services they provide, I wonder if they will take advantage of the huge set of eyeballs landing on their homepage with open wallets. And for a restaurant, a well-done DoorDash campaign could be more effective than Facebook/TV/radio marketing. I do see myself stuck with a bit of a paralysis of choice when I land on their homepage. Sure, there's 50 restaurants near me that I can order from, but all I really know is that I'm hungry right now. Some help choosing would be nice.
- susied 12y ago
  "I just want someone to tell me what I want to eat!" "Sure, there's 50 restaurants near me that I can order from, but all I really know is that I'm hungry right now. Some help choosing would be nice." We just linked to your comment on our YC application because we're solving this exact problem. Contact me (see profile) if you're interested in being part of the private beta.
caseyf7 12y ago
My favorite part of DoorDash is how they got the tipping right. Add it upfront and then they just quickly drop off the food. Munchery is awkward because you're never sure if the person that ordered it included the tip and the driver is hanging around awkwardly making small talk.
- mschaecher 12y ago
  Munchery is upfront in app too.
vladgur 12y ago
im just waiting for the promo codes that follow these funding rounds
gmisra 12y ago
It's disappointing to see that the biggest "disruption" in the logistics space involves shifting risk further down the economic hierarchy. The most difficult part of last-mile logistics has been capacity planning, both human and infrastructure. And yet, much of this risk is now being pushed down to the entities least capable of absorbing it - what is the opportunity cost of being "available" as a DoorDash driver for a given shift with non-guaranteed compensation? The message that is emerging loudly from the SV VC community is that they believe this model is one that should be pursued, aggressively. Let's be clear that in terms of labor and risk management, this is not innovation, it is a return to the status quo of a century ago - one that we as a society fought hard to change. I fear that the plan is to just fight the legal and PR battles, and hope that the robots arrive fast enough and make the situation moot (aka the Foxconn gambit).
- paul 12y ago
  I've talked to the drivers for a lot of different services, and they seem to enjoy the work. In particular, these on-demand services offer a lot more flexibility than traditional jobs where you are expected to show up every day and sit in a chair for 8 hours.
  - jaydz 12y ago
    Traditional jobs guarantee a wage for those 8 hours. Most on-demand services guarantee nothing. I'm glad DoorDash at least guarantees an hourly wage in some markets.
    - paul 12y ago
      My brother-in-law quit a traditional job to drive for Uber, so he must think it's better. (also, he told me that for the first time, he's excited to work in the morning) It's a pretty competitive market -- if a service doesn't provide enough work, they won't be able to retain drivers (plus many people drive for multiple services, especially Uber/Lyft drivers).
      - 12y ago
jpeg_hero 12y ago
I always download stupid SF apps to do my part to throw off the numbers ;)
pairing 12y ago
I use doordash quite often. Their delivery process is excellent and if you get two meals out of a delivery of one meal (the portions at most places are pretty large) the costs are comparable to eating out. I'm glad to see they've received more funding. In the south bay at least, doordash far exceeds the competition for the variety of restaurants they offer. The startup class talk by one of the founders was also quite good.
s_q_b 12y ago
What's the key differentiator from Grubhub/Seamless, or is it simply a direct competitor?
alaskamiller 12y ago
Waiter.com is pissed
habosa 12y ago
Surprised not to see a mention of Postmates here. At least in San Francisco I'd consider Postmates to be the front runner for door-to-door delivery services, followed by Door Dash (sort of an Uber v. Lyft dynamic). I am not a frequent customer of either but I actually do occasional bike deliveries for Postmates (about 5 deliveries a week, on the weekends). Postmates has insane demand, whenever I sign on the deliver my phone is practically exploding with orders, even when they turn on 'blitz' pricing (and it's not cheap to begin with). The product seems simple but I am very impressed with Postmates' logistics. Postmates basically has a comprehensive listing of not only all the places to buy things in the city (mostly food but not only) but they know the full menu, item by item pricing, if they accept cash/credit, open hours etc. So you can place highly specific orders. Postmates gives each courier a credit card which they load with about how much money you will need for a given delivery on demand so you can pick up an iMac or a burrito through the same process. They also have a 24/7 customer and courier support network. So if I get a flat tire on my way to deliver a sandwich they can actually try to get another Postmate courier nearby to come finish the delivery. And recently Postmates has started working closely with some restaurants to provide "turbo" jobs, where the restaurant knows the order is for postmates, provides postmates with an ETA for when it will be ready, which means I can get an order saying "Go to XXX restaurant, the sandwich is already prepared and paid for" and pick it up and go. This enables me to get food to most customers about 30-40m after they order it from anywhere in town. Anyway those are just some things that came to mind. There is a lot more to it (scheduled shifts, tipping, etc). It all goes to show how interesting these seemingly simple ideas are from the inside.

60 points by stanleytang 12y ago

In Palo Alto, there are DoorDash workers EVERYWHERE. Literally every restaurant you go into you see a bunch of people in red shirts picking up meals. I'm curious how this will do in other parts of the country.

7Figures2Commas 12y ago

It's interesting to see investors continue to pour lots of money into startups that classify their workers as independent contractors even though the risks of doing so are clear, immediate and growing[1][2]. The lines between employee and independent contractor are somewhat blurred in some cases, but given how important the cost shifting is to the economic viability of many of these companies, a lot of these investments are damn near binary. That's fine when you're investing a few hundred thousand or even a few million but not at all necessary in today's market when you're investing $40 million. In this case, it's also somewhat ironic that Kleiner Perkins is the lead investor. [1] http://www.latimes.com/business/technology/la-fi-tn-uber-lyft-class-action-2015-03-12-story.html http://www.latimes.com/business/technology/la-fi-tn-uber-lyf... [2] http://time.com/3748438/instacart-lawsuit/ http://time.com/3748438/instacart-lawsuit/

deleted 12y ago
[deleted]
andy318 12y ago
Yup. The new bus service in SF - http://rideleap.com http://rideleap.com - classifies the bus drivers as independents. From their ToS (excuse the all caps) https://app.leaptransit.com/webterms https://app.leaptransit.com/webterms - LEAP DOES NOT PROVIDE TRANSPORTATION SERVICES, AND LEAP IS NOT A TRANSPORTATION CARRIER. IT IS UP TO THE DRIVER OR VEHICLE OPERATOR TO OFFER TRANSPORTATION SERVICES WHICH MAY BE ARRANGED THROUGH USE OF THE SERVICES
- 7Figures2Commas 12y ago
  Hilarious. That's like United saying, "We aren't an airline. It's up to the pilot to offer a flight which may be arranged through united.com."

downandout 12y ago

Wow what a crowded space. This reminds me of the daily deals site era, but at least then there was some room to compete because there wasn't a $40 billion behemoth waiting to crush them. I suspect that at whatever point Uber Logistics (or whatever they choose to call this inevitable extension of their service) takes flight, DoorDash and its $40 million will quickly vanish. This definitely isn't a space I would be doing a startup or investing in at this point.

WhitneyLand 12y ago
I share your opinion, but I would have passed on a Twitter seed round so what do I know. What would really be interesting is to understand why so many smart and experienced people have the exact opposite opinion.
- downandout 12y ago
  The only reason that Twitter is successful is because it was embraced by celebrities very early. I would have passed at the seed round stage as well, but that's because no one could have predicted the celebrity embrace of such a service. The reality is that they, along with most other startups, got seed funding not because of the idea but because of the pedigree of the founders. I suspect there is some of that going on here as well. They are all current/former Stanford students and have been involved in successful companies. According to Crunchbase: DoorDash was founded by four Stanford students: Evan Charles Moore worked on the founding team of Vevo; Tony Xu was at Square and Red Laser/eBay; and Andy Fang and Stanley Tang spent a summer together at Facebook. Moore and Xu were friends in Stanford's business school, and Fang and Tang are undergrads. Same deal with Larry and Sergey, Mark Zuckerberg, Evan Spiegel, and most others. They weren't merely college students; they were Ivy League students. As much as people say college doesn't matter anymore, the evidence says otherwise. We'll probably never know if entrepreneurs from lower-tier and public universities can succeed at an equal rate, because they won't be given the funding to try.
  - harryh 12y ago
    Celebrities didn't embrace twitter for three years after it was launched. That counts as "very early"?

bkjelden 12y ago

My wife and I used DoorDash pretty extensively when we first moved to the bay area, we were living out of a hotel for a few weeks. It was interesting how our reactions to the site differed. I was just happy to have a one-stop list of delivery restaurants with no phone calls, no complicated payment info, etc. Her reaction was "There's no pictures! I just want someone to tell me what I want to eat!" Now, whenever I go to their homepage I see a huge missed opportunity to sell advertising. As sites like DoorDash become well-known hubs for the logistics services they provide, I wonder if they will take advantage of the huge set of eyeballs landing on their homepage with open wallets. And for a restaurant, a well-done DoorDash campaign could be more effective than Facebook/TV/radio marketing. I do see myself stuck with a bit of a paralysis of choice when I land on their homepage. Sure, there's 50 restaurants near me that I can order from, but all I really know is that I'm hungry right now. Some help choosing would be nice.

susied 12y ago
"I just want someone to tell me what I want to eat!" "Sure, there's 50 restaurants near me that I can order from, but all I really know is that I'm hungry right now. Some help choosing would be nice." We just linked to your comment on our YC application because we're solving this exact problem. Contact me (see profile) if you're interested in being part of the private beta.

caseyf7 12y ago

My favorite part of DoorDash is how they got the tipping right. Add it upfront and then they just quickly drop off the food. Munchery is awkward because you're never sure if the person that ordered it included the tip and the driver is hanging around awkwardly making small talk.

mschaecher 12y ago
Munchery is upfront in app too.

vladgur 12y ago

im just waiting for the promo codes that follow these funding rounds

gmisra 12y ago

It's disappointing to see that the biggest "disruption" in the logistics space involves shifting risk further down the economic hierarchy. The most difficult part of last-mile logistics has been capacity planning, both human and infrastructure. And yet, much of this risk is now being pushed down to the entities least capable of absorbing it - what is the opportunity cost of being "available" as a DoorDash driver for a given shift with non-guaranteed compensation? The message that is emerging loudly from the SV VC community is that they believe this model is one that should be pursued, aggressively. Let's be clear that in terms of labor and risk management, this is not innovation, it is a return to the status quo of a century ago - one that we as a society fought hard to change. I fear that the plan is to just fight the legal and PR battles, and hope that the robots arrive fast enough and make the situation moot (aka the Foxconn gambit).

paul 12y ago
I've talked to the drivers for a lot of different services, and they seem to enjoy the work. In particular, these on-demand services offer a lot more flexibility than traditional jobs where you are expected to show up every day and sit in a chair for 8 hours.
- jaydz 12y ago
  Traditional jobs guarantee a wage for those 8 hours. Most on-demand services guarantee nothing. I'm glad DoorDash at least guarantees an hourly wage in some markets.
  - paul 12y ago
    My brother-in-law quit a traditional job to drive for Uber, so he must think it's better. (also, he told me that for the first time, he's excited to work in the morning) It's a pretty competitive market -- if a service doesn't provide enough work, they won't be able to retain drivers (plus many people drive for multiple services, especially Uber/Lyft drivers).
    - 12y ago

jpeg_hero 12y ago

I always download stupid SF apps to do my part to throw off the numbers ;)

pairing 12y ago

I use doordash quite often. Their delivery process is excellent and if you get two meals out of a delivery of one meal (the portions at most places are pretty large) the costs are comparable to eating out. I'm glad to see they've received more funding. In the south bay at least, doordash far exceeds the competition for the variety of restaurants they offer. The startup class talk by one of the founders was also quite good.

s_q_b 12y ago

What's the key differentiator from Grubhub/Seamless, or is it simply a direct competitor?

alaskamiller 12y ago

Waiter.com is pissed

habosa 12y ago

Surprised not to see a mention of Postmates here. At least in San Francisco I'd consider Postmates to be the front runner for door-to-door delivery services, followed by Door Dash (sort of an Uber v. Lyft dynamic). I am not a frequent customer of either but I actually do occasional bike deliveries for Postmates (about 5 deliveries a week, on the weekends). Postmates has insane demand, whenever I sign on the deliver my phone is practically exploding with orders, even when they turn on 'blitz' pricing (and it's not cheap to begin with). The product seems simple but I am very impressed with Postmates' logistics. Postmates basically has a comprehensive listing of not only all the places to buy things in the city (mostly food but not only) but they know the full menu, item by item pricing, if they accept cash/credit, open hours etc. So you can place highly specific orders. Postmates gives each courier a credit card which they load with about how much money you will need for a given delivery on demand so you can pick up an iMac or a burrito through the same process. They also have a 24/7 customer and courier support network. So if I get a flat tire on my way to deliver a sandwich they can actually try to get another Postmate courier nearby to come finish the delivery. And recently Postmates has started working closely with some restaurants to provide "turbo" jobs, where the restaurant knows the order is for postmates, provides postmates with an ETA for when it will be ready, which means I can get an order saying "Go to XXX restaurant, the sandwich is already prepared and paid for" and pick it up and go. This enables me to get food to most customers about 30-40m after they order it from anywhere in town. Anyway those are just some things that came to mind. There is a lot more to it (scheduled shifts, tipping, etc). It all goes to show how interesting these seemingly simple ideas are from the inside.