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DoorDash (YC S13) Raises $17.3 Million From Sequoia To Expand On-Demand Delivery

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Re: DoorDash (YC S13) Raises $17.3 Million From Sequoia To Expand On-Demand Delivery

#21

Post by troymc »

cft wrote: post #5
Nimi wrote: post #4

Good luck! Would you mind elaborating on that defensibility claim ("if you look at any of these local businesses, whether they’re Yelp, or Grubhub, or whatever… once they’re built, they’re defensible")? Why wouldn't this be a race to the bottom where "courier as a service" companies will be lowering prices until competition has eroded profits completely? (just to be sure, to clarify: I'm genuinely asking out of curio…

Yelp is a "pure play" company that does not involve a real physical component. So are AirBnB and Uber/Lyft: they merely annotate the psychical world. Delivery and shipping is a whole another matter. What I found interesting is how Sequoia degenerated from funding AMD/silicon to funding food delivery and calling it "tech".

Uber wants to expand into logistics.

"The new service [UberRUSH] signals the company's expansion beyond local transportation and into the much larger world of urban logistics. And it's a savvy play for several reasons: The same back-end technology that Uber has built to track drivers and connect them to riders can easily be used to order and follow deliveries."

http://www.washingtonpost.com/blogs/wonkblog/wp/2014/04/08/w...

Re: DoorDash (YC S13) Raises $17.3 Million From Sequoia To Expand On-Demand Delivery

#23

Post by jgoldsmith »

iandanforth wrote: post #17

I've never seen a restaurant post a menu on its website with different prices than what you would find in person, however this is exactly the business model of DoorDash. My question is, why don't restaurants do this? Is it illegal? Out of laziness? A tacit custom? Genuinely curious about this.

(I work at DoorDash)

For restaurants that we haven't yet partnered with, we have a slightly increased price in order to pay for the cost of delivery. However, many of our restaurants pay this fee as a commission, and the price on our website is the same as at the restaurant.

We try to be very upfront about this price difference for our customers. For more info, see https://www.doordash.com/faq/#question4.

Re: DoorDash (YC S13) Raises $17.3 Million From Sequoia To Expand On-Demand Delivery

#24

Post by _sentient »

paul wrote: post #16

So exciting! This is actually a surprisingly difficult business because of the need to be so fast and efficient, and there was a lot of skepticism early on as to whether there was actually a viable business in this space. The DoorDash team has done a great job of proving the model and creating a playbook for scaling and expanding the business. They are one of the startups that I most often refer to when advising new…

You wouldn't have a lawn, perchance? ;)

Re: DoorDash (YC S13) Raises $17.3 Million From Sequoia To Expand On-Demand Delivery

#25

Post by GregorStocks »

balls187 wrote: post #22

What makes DoorDash different than all the other Delivery startups out there?

Based on the article, the fact that their customers love them. Of course, it's not hard to have customers that love you at the early money-hemorrhaging stage - the tough bit is continuing to be loved once you're turning a profit.

Re: DoorDash (YC S13) Raises $17.3 Million From Sequoia To Expand On-Demand Delivery

#26

Post by trounce »

ar7hur wrote: post #11

Congrats to the team! I respect what you've done so far, but I can't help wondering how investors can base their analysis on an experiment restricted to Palo Alto, Mountain View and San Jose. From what I see, the bulk of orders (in $) are from fellow startups ordering lunch and dinners. Where else is the world (except SF and maybe NYC) do so many companies, in such a small geography, order so much food from restauran…

Based on the heatmaps, it looks like the customer base is highly concentrated amongst apartment dwellers and students.

Having said that, we live in a house in Palo Alto and my wife is a big fan, to avoid cooking or eating out with small children :-)

Re: DoorDash (YC S13) Raises $17.3 Million From Sequoia To Expand On-Demand Delivery

#27

Post by tpeng »

Nimi wrote: post #4

Good luck! Would you mind elaborating on that defensibility claim ("if you look at any of these local businesses, whether they’re Yelp, or Grubhub, or whatever… once they’re built, they’re defensible")? Why wouldn't this be a race to the bottom where "courier as a service" companies will be lowering prices until competition has eroded profits completely? (just to be sure, to clarify: I'm genuinely asking out of curio…

Businesses in local have two-sided network effects. The most famous two-sided network effect is eBay, where the buyers attract the sellers and the sellers attract the buyers. Here you have local businesses and consumers as the two sides. Ideally, you would have long-term, exclusive relationships with the local businesses and offer some loyalty rewards to the consumers.

There are also some interesting scale economics unique to logistics. It doesn't cost much more to deliver to two houses on the same street vs. one house. So as the density of your userbase goes up, your cost per delivery drops. That being said, scale advantages of local delivery do not approach the scale advantages of a wider network like UPS/FedEx. If delivery were the only aspect of the business, I agree that it would be very competitive

Although I do believe local delivery companies are defensible, they are not necessarily a winner-take-all business in every market like eBay or craigslist. Multiple delivery companies can coexist in a local market, each serving a distinct set of restaurants

Re: DoorDash (YC S13) Raises $17.3 Million From Sequoia To Expand On-Demand Delivery

#28

Post by Nimi »

tpeng wrote: post #27
Nimi wrote: post #4

Good luck! Would you mind elaborating on that defensibility claim ("if you look at any of these local businesses, whether they’re Yelp, or Grubhub, or whatever… once they’re built, they’re defensible")? Why wouldn't this be a race to the bottom where "courier as a service" companies will be lowering prices until competition has eroded profits completely? (just to be sure, to clarify: I'm genuinely asking out of curio…

Businesses in local have two-sided network effects. The most famous two-sided network effect is eBay, where the buyers attract the sellers and the sellers attract the buyers. Here you have local businesses and consumers as the two sides. Ideally, you would have long-term, exclusive relationships with the local businesses and offer some loyalty rewards to the consumers. There are also some interesting scale economics…

So if I understand correctly, the plan is eventually to become the "marketplace for food"? We have one here in the high-tech sector around Tel-Aviv (mainly for lunches), this is indeed very defensible. You might be interested to know they apparently built their customer base by saving the employers the hassle of accounting for the lunches for tax purposes - the employer is simply informed of a sum at the end of each month and that's it; they also have a way to limit the expenditure of employees to something reasonable each month.

BTW, this marketplace take wasn't the impression I got from the TC article.

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