Good morning. If Americans are relieving their post-Thanksgiving fatigue with takeout this weekend, there’s a good chance they’ll be ordering from DoorDash. The food delivery giant currently controls 60% of the U.S. market and is more than twice the size of its closest competitor, Uber Eats.
This is not always the case.
exist a new one wealth featureTechnology reporter Jason Del Rey went on a delivery trip with DoorDash CEO Tony Xu and saw firsthand how Xu built the scrappy upstart into an unexpected powerhouse in the competitive food delivery industry. The startup, founded in 2013 by Xu and three Stanford classmates, once had less than $30,000 left in its bank account. Now, through a combination of grit, ingenuity and a lot of luck, the company is on track to generate more than $13 billion in revenue this year.
Here are some lessons other leaders can learn from DoorDash and CEO Xu:
Zigzag when others zigzag: In its early days, DoorDash differentiated itself in the crowded food delivery space by recruiting gig workers to pick up and sometimes even order food, while rivals at the time grub hub Seamless only works with restaurants that have their own delivery drivers.
Follow your customers: Mr. Xu is proud of himself for working hard on small things to improve service. For example, DoorDash will now highlight desserts on orders because they are most likely to be forgotten. Its app also suggests “Dashers” where to park and which building entrance to use.
Stay informed about frontline experiences: Every employee at DoorDash USA must work four delivery shifts per year. Accompanied by Jason, CEO Xu attempted to deliver four orders in San Francisco. He successfully put down three and earned $19 for an hour’s work. Xu’s practical experience stands out in a world of the super-rich Living an increasingly private life.
Strike when there is blood: In the late 2010s, when UberEats’ parent company was restoring its culture and imposing financial discipline, DoorDash embarked on a spending blitz. The company poached several UberEats executives and expanded its store count from 1,500 to 6,000, including mid-tier cities and suburban towns that rivals ignored.
Be prepared when the opportunity comes: When the coronavirus pandemic drove convenience-obsessed consumers out of cities and turned dine-in restaurants toward delivery, DoorDash’s investment in the suburbs paid off. DoorDash’s business more than tripled in 2020.
Jason warns that DoorDash’s lead is not secure. It could be “superseded by a competitor like Uber, or by an AI-based homegrown company that might not even exist yet.” But for now it has won the food delivery war and is moving into new markets like grocery delivery, where the battle for dominance is likely to be just as fierce.
you can read Full functionality here. —Claire Zillman
Contact CEO Daily via Diane Brady: dianebrady@fortune.com
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CEO Daily is compiled and edited by Joey Abrams and Claire Zillman.