Crazy story: 4 students, 2 Hours, 1 Idea, some luck = $33 Billion!

Back in 2012, 4 Stanford students spent their nights on an app for small merchants.

They gave the app to small businesses to test. A small bakery in Palo Alto. They thought the app will work perfectly.

Well, no, it didn't.  The app failed to solve the bakery's real needs which by the way were pretty simple.

Evan one of the 4 said - "We went door to door and asked business owners to tell us about their work. The most useful question, for me, was

Tell me everything you've done since getting here today?

We tried a few things. One of them was a short marketing attribution survey placed on ipads at retail point of sale. It was a nice-to-have, not obviously compelling."

They realized all their ideas were just "good to have" and not painkillers. Until one day they found the real customer pain point.

"One day, we were wrapping up an interview when we overheard the manager turn down a delivery order.
“This drives me crazy. I have no drivers to fulfill them and I’m the one doing all of it.”

Lightbulb moment 💡. Why can't businesses send things across town, on-demand? There should be an on-demand Fedex!

On Jan 12 2013, they quickly created a static html page, pasted a pdf menus from local restaurants and their personal google voice numbers. They called it PaloAltoDelivery(dot)com.

They kept a $6 delivery fee and started a small AdWords campaign to see if anyone was searching for it.

"Hours later, Tony and I were driving home when we got the first order. I grabbed a notebook and wrote down what the guy wanted from a local Thai restaurant. We placed a takeout order, drove to the restaurant, bought the food, took it to the customer and charged him with Square.

We quickly had trouble keeping up. I remember running out of class to answer the phone more than a few times. We started hiring from craigslist, flyers, and by ordering pizza and hiring that driver on the spot.

I'd start my day by taking out cash from the bank. I'd go to multiple Safeways and buy the max allowed number of Green Dot cash cards, give them to drivers to pay for food, then I'd dispatch and drive, collecting the cards at the end of the day and pay drivers in cash.

Soon, the conversation with restaurants totally changed. "I see you here all the time -- why are you buying so much food? How can we work together?"

They joined YC and changed to Doordash. - "At YC, we came with a list of 20 ideas for how to grow, and asked the YC partners which to prioritize. They said something like ‘How would I know? Do all the things.’”

Doordash went IPO in 2020 and today is valued at $33B and had a peak valuation of $96B.

My takeaways:
1. Test with customers early. Live their lives.
2. Speed matters.
3. Big things start small.
4. Do things that don’t scale.
5. Do all the things. Then double down on winners.

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