Transcript

Advice Line with Tony Xu of Doordash

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0:43 Hello and welcome to the advice line on how I built this lab. I'm Guy Raz. This is the place where we help try to solve your business challenges. Each week I'm joined by a legendary founder, a former guest on the show. who will help me try to help you. And if you're building something and you need advice, give us a call and you just might be the next guest on the show. Our number is 1-800-433-1298. Send us a one-minute message that tells us about your business and the issues or questions that you'd like help with. And you can also send us a voice memo at hibt at id.wondery.com and make sure to tell us how to reach you. And also, don't forget to sign up for my newsletter. It's full of insights and ideas from some of the world's greatest entrepreneurs. You can sign up for free at guyroz.com or on Substack. And we'll put all of this info in the podcast description. Alright, let's get to it.

1:33 Joining me this week is Tony Shu, the co-founder and CEO of DoorDash. Tony, welcome back to the show. It's good to be back. Uh you were first on the show way back in twenty eighteen, uh to of course it tells the origin story of DoorDash, and for those of you who missed it, we will put a link to it in the show notes. Super awesome episode. It's about How Tony worked at the same restaurant where his mom worked when he was a kid, um, because they you know, they immigrated to the US when you were like four. You changed your name to Tony because you love the show Who's the Boss? And it star Tony Danza, uh which is such a funny star. Love that story.

2:08 Uh and of course how you came up with the idea for a food delivery business while you were at Stanford uh at the business school. And an idea that I should mention was met with c considerable amount of skepticism at the time, right? Yeah, absolutely. Yeah. And in part because people probably thought, well the logistics and all the costs associated with costs, how the margins gonna be terrible. I think when you were on the show in twenty eighteen, DoorDash had had done something like a hundred million

2:34 deliveries at that point. And I think as of last year, I read you processed over two and a half billion Order. Is that right? Yeah, yeah, that m magnitude of change is is is hard to comprehend sometimes. But yes, a lot has changed in a short period of time. I mean it's amazing. DoorDash is now the largest food delivery service in the world. Um Tony, I know that uh you know today, obviously you guys are continuing to build DoorDash into a an even bigger, broader platform for, you know, local commerce, logistics. You've been expanding into grocery and retail. International markets I've I've used

3:08 uh some of the other b brands that you've acquired like Walt and and Deliveroo and which I I think is still a process. Can you tell us a little bit more about Some of the things going on with DoorDash now. What is the sort of the e vision for expanding the platform? Sure. So

3:25 You know, when you and I last spoke seven years ago, we were largely A single product, so restaurant delivery. Yep. Um single geography United States. Company.

3:37 And that occupied, you know, well over ninety nine percent of what we did. Today, Dorash. is a business with, you know, five big areas. Obviously we still bring you lunch and dinner inside the US. We, as you mentioned, expanded about five years ago into other categories, delivering you groceries, convenience items, retail items We now do this also internationally. So you mentioned that um, you know, a couple acquisitions that we've announced. We now operate in over thirty five countries. We have a B2B business where we help you do delivery from your own channel or help you with online ordering from your own app or your own

4:17 website. It's amazing. Um one of the things that I was I was wondering about, right? Because when you launch when you started it out, it was called Palo Alto Delivery Service, which doesn't doesn't flow off the tongue quite as easily as DoorDash. Um It was I think just it was like eight PDF menus and a Google voice number that went to you or one of your your founders, co founders. Yes. How how were you measuring success? Like was it was it from the interest and engagement from from restaurants or or was it from people ordering from the platform? Like how did you know this was sticking? Yeah. And you're right. There are three questions actually to know whether or not

4:51 the idea for DoorDash would work. But the first question really was, would consumers care if we made available All restaurants for delivery. Um you know, in twenty thirteen, only about ten to fifteen percent of restaurants offered their own delivery. Wha and what we looked for really was How often would consumers order and come back? Without

5:12 a discount or some sort of a marketing incentive. The other questions of course, well one, will will restaurants actually want to partner with us in adding incremental sales to their Kitchens. And the final question was would drivers, the dashers we call them on our platform, would they actually want to partner with us? Yeah.

5:31 You know, every once in a while I'll I'll be on LinkedIn and that video there's a video of you and your three other co founders. video for uh Y Combinator in twenty thirteen. And it's so fun to look at because you guys are so young and Just naive and and bright eyed and and very uh s kind of just you know, humble and uh

5:52 And it's hard to imagine twenty thirteen today This is a company with a market cap of over a hundred billion dollars. I mean, you know, you're you're it's just unbelievable to see How quickly It's grown. But during that in that time, I mean there's been a lot of stress, right? Like we talk even back in twenty eighteen we talked about it about on the show how you know at a certain point Uber saw what you were doing, and Uber was a giant of behemoth.

6:15 And they start a competitor service, Uberet. How how have you managed Stress. Over the years. of trying to do a lot of things, of dealing with competitors, of just you know, changing laws in different states. Like how do you manage all of that?

6:33 and handle the company. What are some of the things you do? Yeah. I think one of the principles that helps a lot, at least for me, is just focusing on what I can control. I don't get to control a lot of things and and it just starting by you know, almost writing on a list of things of what not to worry about. I can't control what our competitors do, how much, you know, financial resources they have versus us. But I am able to control what products we deliver. And ultimately, you know, I get to control a lot of

7:02 how we interact and serve audiences and our customers. And I a and I and I feel like a lot of times when we experience stress, there's this possible feeling of being overwhelmed where everything is lost. Our agency completely goes away. And I think that's again a reason why, both on the professional, what I do day to day, as well as personal front, of trying to find high agency activities where I know I'm still in control. I'm still getting to feel very satisfied with the majority of hours I spend doing what I do. That's what allows me to keep going.

7:36 Tony, um are you ready to take some calls? Yeah, let's do it. All right, let's bring in our first caller. Welcome to the advice line. You are on with Tony Shu. founder of DoorDash, please tell us your name, uh where you're calling from and and uh just a little bit about your business. Hi, uh Guy and Tony. It's a pleasure to be here with both of you. Uh I am Ron Kormay, CEO and founder of Stillport.

7:57 Nyfeco in Portland, Oregon. We are a small team uh crafting Heirloom quality, carbon steel. Kitchen knives in Portland, Oregon.

8:08 Basic uh tenant and every product that we make has to pass three requirements, iconic design functional details and everything US source. Locally made. Wow. Uh Ron, thanks for for calling in. So Steelport Knives. I'm I just

8:22 popped on your website. You make knives in the US, kitchen knives and chef's knives, which I'm a huge fan of because I'm a cook and I've got a bunch of knives and wow, I it's awesome. Tell me how you Start of this'cause um m m many of the best knives in the world are n today made in Japan and Germany, and even China there's some excellent knives made, but You know, very few made in the US. Codco is an example I can think of. Tell me about uh h why and how you started this. Yeah, I think is uh like any a lot of the stories of entrepreneurs is uh source of it has been frustration and seeing a big gap.

8:56 in the market uh place. My background is uh technology and I've been involved with eleven uh startups uh throughout uh my careers. Wow. Uh my previous company uh was a company called Finex Cast Iron and we were the only premium American made cast iron And we started that in two thousand twelve and I sold it in two thousand nineteen. And now there are eight other companies that make that category. So created the category and uh one of my drivers around how do we bring jobs back to US. In two thousand nineteen I had the same experience. I went to

9:29 The kitchen retail stores in the US, all the national ones and some of our local ones. And exactly what you said, Guy. Every single knife was made outside of the country, primarily Japan. The premi the premium knives.

9:46 Hundred percent. And and if you know my background and things like that, that's like call for a fight, like why? And if you're in a knife nerd and in the cooking, uh you know that there's some really good artisans that make amazing knives in the US. So I partnered with uh my business partner, Ethan Sayas, who has twenty five years of experience making knives, sharpening knives, and we started a steelport out of that. Big gap. But we are standing on shoulder of a very strong knife industry in the US, even

10:15 Portland, Oregon is a knife town USA. Because we have so many knives, but they're all outdoor knives. So we're actually building on that. Alright, I wanna bring Tony in. Before we bring him in, tell us your question. So my question is that as we are a small company uh growing, uh when is the right time for a consumer goods startup like ours? to expan expand his product line versus going deeper

10:38 into his core offering. But we're Smart uh people and we can start thinking about new stuff, like you have a new line of cutting boards. That are innovative is patent pending and has a really potential for doing that. How do we approach that decision?

10:53 Right now you're selling only knives, but now you're thinking of cutting boards and other things, but when is the right time to do it? Tony Shu Uh Are you cooked? Do you cook at home? I do cook. I uh I I I don't cook every night uh like you do, guy, that I just learned. That's incredible. That's an uh that's an aspirational feat for me to do it every night. But

11:14 Okay, so uh it's a tough question. And uh, you know, first c congrats on everything. I mean it sounds like it it's an incredible success. And I'm gonna learn a lot more now also about Portland. I don't know, it's called Knife Town USA. You know, the first the first part of what I would think through is do I have the management bandwidth? Do I have the talent on my team to do it? What I've tended to find um with projects um at any company, no matter how much resources or capital you have. Um, what tends to be the rate limiter is do you have a great single leader lead, it doesn't have to, you know, manage a large team or anything who can actually be responsible end to end for the next thing.

11:55 In this case cutting boards. If you have that person, it doesn't have to be your co founder, but it could be someone else. who you believe, um, you mentioned yet a small team who can do that end to end. I think that's a Positive. The second question I would ask is

12:12 Do you have the financial runway to be able to manage you know, obviously uh what I would imagine would require some upfront in investment, uh whether it's in materials or team or distribution later on, um as as you think about selling cutting boards. One of the nice things I do see here, obviously, is cutting boards hopefully will help you sell knives too, which means that the two products reinforce one another. So that might be a nice offset. the final thing I would say. I I think if you're feeling fully ready, you're probably too late. Um so there should absolutely be some element of risk. But I I do think you can manage the risks if you can

12:49 Disentangle the problem. No, I I I really like the uh points that you're bringing up. Uh and again, as your your experience in DoorDash uh probably matches that You the answer to those questions never yes. never have enough smart up the enough resources like that. It becomes a question of trade off. Yeah.

13:10 side I'm also uh another role I have is a faculty at university and a joint professor, so my professorial question is always polymath. Yeah, but uh but uh my professor question always oh look at the trade off that's in the classroom environment, I can advise that, but when it comes to my own business, it's really hard, especially as a small company, to project if I grab those resources that you're mentioning and put it in the core. I don't really know. with any confidence more than fifty fifty.

13:39 what it will result versus putting something else. And I think looking at the history of Doordash, you had to make similar stuff around do you focus around region and things like that. Is there at a certain point you just show your heart in it and go with your God? I do think some of these kinds of strategic decisions are hard to your point, Ron, of putting it in pencil and paper or on a spreadsheet or ask AI to help make the decision. I think like you said, you're not gonna have the inputs required. You're not gonna have the data um required. So it it is a bit of a But what what I'm trying to say is it doesn't have to be this like all or nothing. kind of bad. That that those tended to not be, I think, the the decisions in in this particular case where you're talking about, you know, adding a second product. You know, one that comes to mind for us at DoorDash was in twenty um

14:28 sixteen we wanted to launch DoorDash Drive, which was this product to uh enable anyone to offer delivery from their own channel, from their own, you know, website, their own app, not they don't have to list even on the DoorDash app to do this. And You know, when we thought about starting that project, you know, some of the things we thought through uh even though as we were still scaling our own app uh across different cities, um

14:53 Was Yeah. you know, who is this small group of leads that we can put together Where we don't feel like we have to bet the whole company. Um, but

15:03 We can Uh give it a great college try, since you're a professor, I'll use that. Um, where we're gonna put one of our best lead on it, who we think can do the job end to end. Um, first and foremost to figure out whether or not there's something there. I totally agree. I would start by treating it as an experiment and

15:23 An experiment in which you are willing, even willing to lose on, willing to lose money on. In other words, If you want to do the cutting boards, it sounds like you are. I'm patent pending cutting boards. I'm excited. What what what innovations could possibly be be being made in cutting boards, I can't wait to see. But what I would what I would probably the way I would I would go about it is treat it like an experiment, right? Run a uh maybe do a limited drop. to the most loyal customers. And if it sells out and builds buzz, if there are only a hundred available and they sell out and they build buzz,

15:58 You know the demand is real, but if not You know, you you're you've kinda protected the core here, which right now are knives. And you could always go back and try it again. I think of So there's so many HexCloud is a great brand. We did that that episode on the show a couple months ago. And you know, those guys started with pants.

16:17 Pans and pots. Now it's a multi primitive, they've got all kinds of bakeware and It's it's a huge business. Cold Hexclad. your name Steelport gives you a lot of room to try a lot of different things. Right? You don't it doesn't just have to be knives, it can be uh broader category of of uh US made

16:38 kitchen tools, right? And so I think to Tony's point here. you have an opportunity to really just experiment and to take Let's say a uh not a baby risk. But like a a a toddler risk here, right? Not not a full full on, you know, grown up risk where you're betting the farm, but you you you you try something and see how people respond.

17:00 I really love the uh combination I'm hearing from you guys, which is uh testing Which is not only testing the market, but I think Tony you highlighted the leveraging, which is a potential opportunity people Like guy Might not be ready for a high end Top of the line uh knife. But they need a cutting board.

17:19 And why not use this? And they might get into it and say, It's still poor cutting board, but it's really amazing. Now I'm ready. to make my experience complete or vice versa. And that the cross leveraging and pollination is not knowable until we actually launch it. And guy, I uh I really like your connection of the name. The name still port comes from Steel.

17:40 First half. I'm Port from Portland. Yeah, so steel port combined becomes kind of opens up and our new innovation is basically embedding Steel inside two different lay of uh end grain cutting board and a composite recycled paper. So you have a two sided

17:58 Cutting board. The steel reinforcer allows you to not only have two sided cutting board, but also make the cutting board extremely thin. It's about uh half an inch thick compared to one of those instances. I love that because I have one of those like slots in my kitchen with my cutting boards. I got rid of all my plastic cutting boards because everyone's telling me that there's, you know, you only beating plastic, but the wood cutting boards are so thick. that it just takes up so much space in that you know that That cabinet. Mm.

18:24 Great. So I expect uh to have a couple of customers coming through with names Tony and Guy on the yeah, for sure. For sure. Ron Cormae uh Steelport Knives is the brand. Good luck. Thanks for calling in, man. Really appreciate it. Thank you for having me. Have a great day. We're gonna take a quick break, but when we come back, another caller, another question, and another round of advice. I'm Guy Raw, stick around, you're listening to the advice line on how I built this lab. Welcome back to the advice line on how I built this. I'm Guy Raz, and my guest today is Tony Shu. He's the co-founder and CEO of

19:03 Door dash. And we are taking your calls and let's bring in our next caller. Hi Guy, hi Tony, thanks for having me. I'm Catherine Shaw from Raleigh, North Carolina, and I'm the co-founder of Spring and Mulberry, a line of date sweetened dark chocolate bars. Spring of Bulbaray began with a radical question. Can sweets be indulgent without refined sugar?

19:26 Um thank you, Catherine, for calling in. Welcome to the show. Thank you. Um so spring in Mulberry It's a chocolate company. You make chocolate bars, right, I I think and but you use dates to sweeten them, not Cane sugar or corn syrup or other kinds of of sweeteners.

19:43 Yes, correct. We use dates because they're a whole food ingredient. They're full of antioxidants. They actually have more ant antioxidants than blueberries, more magnesium than bananas. And the key is that they're full of fiber, and fiber helps slow the absorption of sugar in the body. of reducing the glycemic index and glycemic load. Awesome. I'm looking at your website and I see that they're very artistic bars. It's like the

20:09 dried strawberries pressed into the bar and pecans, whole pecans, and like mango pieces. Um really beautiful. Tell me about the idea or the origin story of the company. Well, it all started on a trip to Dubai on the way to visit my husband's family in India. There I discovered dates. Presented and elevated and beautiful gift boxes.

20:31 And a few years later, I unfortunately was diagnosed with breast cancer in my mid thirties. And that led me to quit refined sugar and explore the healing power of whole foods. And I wanted to showcase this wider world of flavor in our chocolate bars. So we either top them with fruits and florals, nuts and spices. uh with flavors like mulberry fennel or mixed berry or pecante.

20:57 Or we infuse the chocolate with essential oils. Creating nostalgic flavors like mint leaf, coffee, and blood orange. That's awesome. I I w w tell me a little bit about your background. Did you come from food or or confections? Both my co-founder, Sarah, and I have worked in consumer products and luxury goods our whole careers. Um, she was an early employee at Harry's Grooming and at Siggy's Yogurt.

21:21 Uh working in product development, operations, and finance. And I got my start in marketing and sales at Unilever and then at LVMH, Moet Hennessy, Louis Vuitton. Yeah, wow, that's a great b great background to have. It's I mean you you you know what you're maybe you should be telling us what to do. With that background. One day, guys. Sounds like I hope so. Tell tell tell us a little bit about how the business is doing. You said you started it in twenty twenty two. We did. We launched in beta in the spring of twenty twenty two, launched fully uh it for holiday that year.

21:56 We've grown two to three X um year over year consistently, and now we're doing mid seven figures. We expect uh to double that in twenty twenty six. Wow. Uh we have um omnichannel distribution strategy. We want to be in natural channel grocery stores like whole foods and sprouts. But we also want to be in specialty retailers like airports. Total Wine, Nordstroms and Bloomingdales, where we've launched this year.

22:23 Um and direct to consumer is still fifty percent of our business. And probably the best margins. Of course. Yeah. Uh cool. I I have more questions for you before we get to to them. What is your question for us? Well, we're really at an inflection point. So far, uh to date in the business, we've been profitable, but we're now starting to feel the cash flow strains of rapid scaling.

22:47 I would love to hear um from both of you as we think about what types of capital to raise, which partners to bring on. And how much risk to take? in growth versus profitability. What frameworks would you recommend for helping us make those decisions as we fundraise into the next year? All right, some big questions to answer. Um Tony Shu wanna bring you in. Um

23:09 Questions for Catherine. Yeah, I mean Catherine, it's uh first of all incredible your your personal story. you know, uh of turning a a a life event into You know, this This

23:21 awesome, you know, solution, um, not only for yourself, but for a lot of other people. So That's incredible to see. You know, when I think about um what you're saying The first question I kinda wanna ask is um What is the goal with the company? Our long term goal is really to help transform America's relationship.

23:40 With sugar. And to do that by creating a product that's wholly better to showcase how sweetness doesn't need to come from something that you know, is linked to every major disease we face. We really believe in kind of sustainable consistent. Growth, but

23:57 In the next year, in order to hit eight figures, we need to launch nationally. You know, at whole food, sprouts, or other major players. And that just requires a lot of cash. Grocery stores. Uh.

24:10 Require slotting fees. Uh they require free fills where you send in free product. You of course need to support the product once it gets on shelf to make sure you know you're hitting strong velocities. And so we have two reasons we're in a bit of a cash crunch. The first is just the seasonality of chocolate. We have to buy all of our holiday inventory during summer, which are the slowest months in the chocolate business. People switch to ice cream. And then the second is you know the upfront investments to get into

24:40 uh these grocery stores. Got it. Okay. No, that's super helpful. You kinda stated some of the right principles, I think, from the beginning.

24:50 um uh in your question, I think that's definitely, you know, principle number one. And you know, principle number two is you don't want to lose control. in terms of you know how you run the business. And You know, the best way to achieve principle number two of not losing control is actually to achieve principle number one, which is to keep up the moment the momentum. The way I tend to think about this is you don't have to think about the financing Yeah.

25:16 All in one go. Meaning, you know, I asked you a little bit about your goals for the company and it sounds like they're pretty large, actually. You wanna, you know, take this nationwide, you wanna take this into other categories over time. You don't have to think about All of that, you know, in this next fin financing milestone. Right. One of the ways to build momentum is t to think about always being able to deliver upon whatever promises you make investors. If you keep, you know, delivering upon those promises You're gonna keep likely creating

25:46 better outcomes for customers, which is going to, you know, give you more opportunities to give more financing. If you can keep, you know, th that that expectation again, this process, I think would do very well for you. And so the first question I probably think through if I were in your shoes is what is the next milestone? Is it to get to all of the whole foods you mentioned and the sprouts of the world, is it to get to more than that? If we were to think about what that milestone is, then work backwards on all the fees you mentioned and all the investments perhaps in product development or distribution. Um and then if you were adding a bit of buffer for some of those plans. Um, you know, what does that look like? You know, that's probably the first starting place in of thinking through what is the investment size you may need to get to the next level of scale for the company. Then the obvious question for investors will be, well, what do I get? In exchange for for those dollars.

26:41 Based on what you're saying, if you can healthily grow two to three times, which which sounds like you are today, which is incredible, by the way, uh I I think you're gonna I think you're gonna find lots of willing suitors. Yeah. Yeah, I I wanna I wanna piggyback on that. for a second and ask you a quick question, Catherine, which is and have you raised money already? We raised a pre seed um when we were still a low six figure brand.

27:07 Um and have used that money over the past two years to get to mid seven figures. Yeah. Uh those were mainly strategic angels, people who had worked In the industry. But we have not raised from venture capital. Got it.

27:24 Well, as you know, and m you're so let's say you're doing about five, six million a year in sales, which is amazing, right? You're at a point now where you need cash, right, to to fulfill these or so there are a couple of options'cause you know this. better than anyone that that not all money is the same. Right. And so is are are there other options, you know, uh uh lines of credit. Um

27:46 Uh revenue based financing. purchase order financing. We've had a lot of brands on the show that have gone that route. You know, they'll get a purchase order, they'll go to a uh you know f find lenders uh s oftentimes at the high interest rates, but it's but you You hold on to equity.

28:02 Those are all options if you decide that you don't want to go out and raise Capital. Ha are th are any of those uh on on the table? It definitely makes sense for the summer. cash flow crunch of buying inventory because

28:18 you know, that isn't a burn rate problem. That's uh when money comes in versus when it goes out. So I think that makes a lot of sense for debt. On the equity side, I would say that would be more appropriate for investing in retail expansion, investing behind brand awareness, building exercises, and that sort of thing. You know, on the debt side, you know, I feel a little bit nervous about taking on significant debt. If we're not going to be profitable. And this is the first year where we're, you know, kind of try to figure out how close to zero we can be on either side of zero.

28:52 So I guess a follow up question for Tony would be as you you know, you've raised money from Some of the most Prestigious venture capital firms in the world. What questions did you ask them to make sure they were the right partner for you?

29:07 Yeah, it's a great question. Um I I I think lots of times we take for granted as the entrepreneur that investors will do diligence on us, but perhaps we don't return the favor and due diligence on them. You know, I I think one of the principles that I would add to I think a lot of the great recommendations Guy made around alternate financing mechanisms is just What are the time expectations for you know achieving your milestones or getting your money back. Uh if you were the investor. And

29:37 Uh, what are the examples in your portfolio? um of companies or previous investments because time I I think is one of those things here that is almost always against the entrepreneur. Where we always wish things could happen sooner. you know, uh dimension of time. Um, I would ask for examples of founders and entrepreneurs uh who perhaps did not make it. um in their portfolio and ask uh to, you know, call three or four of them. And then you'll get a pretty good triangulation in speaking with, you know, the

30:11 founders of the company, especially those who maybe had less successful, not successful, or shaky situations with the investment firm to give you um maybe the comfort you need to actually proceed or Or find other financing mechanisms.

30:26 Um Catherine, it's Mm. Uh

30:29 really, really s really important advice, Tony. And I I think that I I it sounds, Catherine, like you know you sort of have a sense of what you need to do, right? To to to cr sort of build distribution, national distribution, brand awareness, you're gonna need equity capital, probably, right? Because you're you're investing ahead of revenue. Short term cash crunch, there may be other options.

30:51 One one unrelated piece of advice I wanna give you, just uh observing your brand is You have a really interesting opportunity here because over the last few years there have been some really big brands that have grown. Um that are zero sugar. Lilies, for example. We did Lilies on the show. It's an amazing story. Yeah. Um, and that was uh sold to Hershey's. There's Chuck Zero, which does a similar thing. Um and then you've got you know the sugar brands.

31:16 one thing that you could think about as you think about the sort of your long term growth and strategy is Consider making a a package of like squares, you know, like Ghiradelli makes those squares. And so you're only getting one, two grams of sugar per square. And it's a small indulgence. And it's a it's also less expensive. Maybe maybe it's only Seventy five cents or a dollar, you know, at the checkout stand, right? Because your bars are expensive. They have to as a premium product. But but going forward, you might want to think about

31:47 a bag of just squares that you could down the road sell at Costco. Ca that's really where you start to see Big you know. large scale growth. Right.

31:58 And it gives the opportunity for people to trial. Or they buy you know a seven or nine dollar chocolate bar. Yeah. Yeah. Tony, any last words of wisdom or advice for Catherine?

32:11 Sounds like you have a Really awesome business. And so I I mean and and you have a I mean r really great head on your shoulders, so I would just you know Keep going. And I can tell based on the questions you're asking that you have a pretty strong point of view of what you're looking for and what you're not looking for. Just stick to those guns. And I I I I think that a lot of times as you know, the entrepreneur going through it for the first time

32:36 um or going into anything less familiar, there's always this um desire to seek the expert opinion, if you will. And sometimes that helps. But I think a lot of times um your gut probably already knows the answer. For sure. Catherine Shaw of Spring and Mulberry, thanks for calling in. Good luck. Thank you, appreciate it. Thank you.

32:57 Um yeah, it's the we have done Quite a few chocolate brands. On the show. And uh it's always just a cool It's always super cool.

33:07 You know, you think Like in all these categories, you think, Oh, well it's crowded. There's so many chocolate brands, and there are. But a good brand, a a a differentiated brand, like this one. I'm absolutely gonna go into some of these stores and yeah, and probably buy one in You know, indulge myself. Yeah, I mean just really beautiful art just artful, beautiful bars. And so it's it's cool. It's a great idea. And it's not it's not sugar free, but it's it's lowered. It's natural sugar.

33:34 And it's and there's fiber and so I think I looked at the uh nutritional label. Four grams of fiber It's a lot of fiber. I mean that's you know, that's great. Alright, we're gonna take another quick break, but we'll be right back with another collar. Stay with us, I'm Guy Roz, and you're listening to the advice line right here on how I built this lab. Welcome back to the advice line on how I built this. I'm Guy Raz, and my guest today is Tony Shu, he's the co-founder and CEO of DoorDash, and we are taking your calls and let's bring in our next caller. Thanks for having me, Yori. Goodbye. I'm calling from uh Stanford, Connecticut.

34:17 Um I'm uh the founder, operator, and investor of R twenty two meets. For the past twenty years I've been uh in Элі стейч технології компанії. Um in various roles.

34:30 And Route Twenty Two Meets is a mission driven company that was created to bridge the gap. Between small family farms and conscious consumers We Ship grass fed and grass finis meats from small family farms with full traceability back to the farm where it was raised.

34:51 Great. Thanks for uh calling in, Yori. Welcome to the show. So route or route, depending on your pronunciation, route twenty two meets. It is a You sell grass fed meat, basically. Uh like a like a box. That is correct. And and and ship directly to consumers frozen. That's right. I'm assuming. That's right. Okay, great. And and tell me a little bit about how you started this this business. I started this business because I personally was looking for the product and could not find the product that I was looking for. That's one one reason. The second reason I spent eight years managing the US operations of a medical device company and I was exposed firsthand for the healthcare system and so how broken it is. And I want to be a part of the solution. I wanted to

35:35 Bridge that gap between quality, clean food, if you will. and conscious consumers. Got it. Okay. But here's my question, right? And and I think it's awesome. I I love grass fed beef. I try to eat it basically ninety five percent of the time when I can. Um

35:53 There are options out there, right? There are companies, tons of options where you can order online. Get grass fed meat sent to your house, even grocery stores, many e you know, even Costco sells grass fed ground beef, I think. So what what is the thing that you're you're trying to offer that's a little different. So at the at the basic level what we offer is full traceability to the farm. So you know you can get a box with different cuts.

36:21 And every cut is gonna have a different label. And you can see which form it came from. Okay, we don't Or? with big farms, it's small family farms on that level.

36:34 Now what you mentioned is part of the challenge. Is because there is a trend, and a lot of more people become aware of of the health benefits of grass fed and grass finished meats. But there is no clear regulation that constitutes what grass fed meat is. uh the юсді дроб даніш твої сісти

37:00 So essentially you can go to the supermarket, find on the shelf A product that not necessarily meet the standards of grass fed and grass finished. Interesting. It's sort of like when you see things that I'll say all natural. It means nothing. All right. Uh um before I bring Tony in, uh, what's your question for us today? Uh The question to Tony is like

37:24 Given our size and resources. How can we most effectively educate consumers and stand out in a market where larger player can outstand outspend us? Ба канат мачо автентиці. Full traceability. Regenerative standards and true grass fed and grass finished meats.

37:47 All right. Um Tony Shu, um you can before we answer um uh Urit's question, maybe you have some questions for him. Well may maybe I'll uh I'll start with a thought uh Yori and first, you know, a as a uh as a consumer, I'm a big believer um in what you're doing. One of the things as I hear you talk about Is this importance of finding the right customer for your initial product? And obviously it's someone who cares deeply about the same things that you do. And the the the so the first thing I I almost want y you to say is to n not lose that. I think there's two challenges I see. One is can you build a product

38:25 that that truly delivers upon You know, the promise that uh you're you're talking about. And then the second is how do you actually market it so it can actually maybe grow an awareness in a way that is authentic. But also I think differentiated from you know uh others who can outspend you. We really have to make sure that it's a product that people actually care about. Meaning it's not only grass fed and it's traceable to your point, but that it actually

38:52 Tastes good. And that it's as good or ideally better than what's available. You know, I I I think that's a big part of um what uh how we get judged. Then the second piece is almost like can we can we work together with that group of customers to figure out What is a

39:09 term we can use to almost, you know, build a standard, if you will. For The type of product or the quality ingredient that you're actually bring to the customer. Um you mentioned that, you know, maybe the USDA um is is not yet a willing partner. That's okay. But is there some

39:28 term that almost the community of customers that you have that comes back and again and purches your product over others. that we can then use as actually the way to, you know, tell our story. It's always best to tell the story from the customer's perspective versus our perspective because it's a lot more natural and promotes that viral um word of mouth growth. Yori, I'm you I'm curious, give give us a sense of your revenue so far. You've you've you I think you mentioned you founded last year. How you got how much How much have you done sales so far? So we're we are probably gonna finish the twelve months of operation with about a hundred K.

40:04 It's great. In a forming community. But funny enough used to be a McDonald's building. Uh we Fix the building.

40:14 And now it's being used as a distribution center. And later on this year we intended to turn it into a farm store. And bring more farmers. to sell their products because farmers are good at farming, but they don't, you know, cold supply chain is something that is комплекс

40:32 uh e commerce and things like that so we want to build the platform that will enable them to Actually make the product available to people across the country. Tony, are you finding that that I mean, I know that on DoorDash, you know, there's healthy options, there's a bunch of de there's a bunch of different categories. Are you guys able to discern any trends like our Are you seeing people looking out for more sort of keto focused diets or

40:59 Grass fed. I mean, is there a way for you to even know that? Yeah, well we look at search terms. Um so we definitely, you know, see search behavior. And you're right. I mean I I I think while there are geographic uh differences, uh I think the the the mega or macro trend is still on point to what Yuri your building, which is everyone wants to Be healthier.

41:23 And that's y you know, there's exercise, but there obviously nutrition and diet is a massive part of it. And so on DoorDash, um people do look for these other options. And I think um the the key is, you know, you it's almost like you're building this fire. Right. And the most important thing is for that fire to keep burning in the beginning. And it's gonna keep burning.

41:48 If you have the group of passionate people, whether it's you know the fitness enthusiasts, the people who are searching for this, it could be the restaurateur who really appreciates um, you know, food from very clean supply chains. And I think as that fire, you know, gr it keeps going, the way it's gonna keep going is A, they bel they actually love your product. So I think it has to be both authentic, clean And it tastes great. Um And you know, will they actually wanna keep coming back to it.

42:18 Talking about it. And then that gives you the right to, you know, build this huge you know, explosion of a movement which then allows you to build this platform into of you know, for all farms across the country, the world, perhaps one day. Um to do this.

42:34 Yeah. That's It's great. And Yori, one last bit of advice. I think I think a a one or two well placed podcast interviews Right, or uh you know, or or even a public talk at a library. Something is is

42:49 much better than thousands of dollars spent on Facebook ads, right? Because if you can spend time talking about about these issues and why you believe that grass fed is there it means many different things and that what you're offering is different. It would be worth having even if it's a podcast it's only heard by a thousand people or five hundred people.

43:11 It could have a really significant impact. Because it's your business is a kind of business that grows Through word of mouth. It's people saying to other people, I'm getting this great meat from this place. Yeah.

43:22 Yeah, we should uh keep going at it and Uh reaching out to other communities. Yori Gabe, the brand is called Grout twenty two meets. Uh good luck, thanks for calling in man. Thank you. Thanks.

43:34 Yeah, it's it's r it's interesting because I I I think even even though I know a lot about this world'cause I I I've been eating grass fed meat for a long time, like probably fifteen years. I used to order from a a farm out in um Idaho. I didn't know that. I did I I assume that when people say grass fed, it's grass fed. Like that's what they're the animal's eating. The whole time.

43:55 No, I think it's a uh I I I think a lot about um Well starting with our bodies and then, you know, to the things we put into our bodies, um, I think we kinda just take for granted or we don't think about it. And I I I think you're absolutely right. Actually there is a massive void in society and but but also in in the in in the food industry where someone like Yori can actually occupy that space to define it for us. You're you're you're spot on. I mean this the traceability point is one that I I I didn't know about until probably a couple years ago.

44:28 Yeah. Yeah and and You know, in in this space, I mean food uh certain I mean certain brands can have a huge impact. I mean Chipotle with Nyman Ranch pork. I mean Right, I mean

44:40 Absolutely. grass fed b beef is still g it's gotta be less than one percent, may be maybe even smaller than that, of all beef consumed in the US. Yeah. But as more and more people kinda learn about the benefits, uh, you know, it's uh There there's a there's a lot of growth there. Yeah, a hundred percent.

45:04 Tony, I should have known that your advice would be great, amazing. I mean, you've been you've been through versions of all these things. Like the dilemma over fundraising, over how to expand your you know, your your line. uh you know, how to build awareness for this thing that it was weird to people. Wait, what? I want f you know So I mean it's it's amazing because It wasn't that long ago when you were having these

45:28 Yeah, twelve years ago. I mean I I think one of the things that is um the privilege of being an entrepreneur um is that implicitly, um, and I suppose with shows like this explicitly, you belong to a community of other founders who

45:45 honestly go through those similar problems, whether it's in chocolates or knives or Um, you know, what Yori was doing with meats and it's just um they're very similar. I mean, you're a founder and and you know, you you've gone through these similar issues too. If you could go back to when, you know, those early days looking at that video of you and and and Andy and Stanley. It's not it's awesome. It's an awesome video. You should you should you should be really proud of it. If you go back, right, and to you, to yourself when you were learning how to be a leader and how to

46:17 You know, and how to start a business. And you kn knew what you know now. What what do you think might have been helpful for you? To have known then. I think the first thing that comes to mind, especially as I was hearing some of the stories of of the founders on y your show just now is um

46:37 A lot of times the founders know the answers. to the questions that they're seeking help on. And recognition that other people and you cited so many of them, you know, uh who've created great products

46:54 We're no different from any of the founders who are calling into your show and trying to get advice about all these different business building questions. And That's something that I that I wish I would tell myself. you know, twelve years ago that Trusting my own instincts.

47:10 writing things down so I wasn't delusional and I can use that as a very intellectually honest exercise to debate with whoever I was trying to get help from. I think those sorts of things I would just put extra emphasis on And y you asked me, you know, sometimes where I gain sources of motivation or l lessons learned A lot of it comes from my own team.

47:35 and watching what they do, their successes, their setbacks And You know, deriving lessons. From them. That's awesome. Tony, thank you so much for coming back on.

47:47 Yeah. Thanks, guy, for having me. If it's Tony Shu, co-founder and CEO of DoorDash. And by the way, if you haven't heard Tony's original How I Built This Episode, you've got to go back and give it a listen. We will put a link to it in the show notes. Thanks so much for listening to the show this week. Please make sure to check out my newsletter. You can sign up for it for free at gyros.com. Each week it's packed with tons of insights from entrepreneurs and my own observations and experiences interviewing some of the greatest entrepreneurs ever. And if you're working on a business and you'd like to be on this show, send us a one minute message that tells us about your business, the issues, or questions you'd like help with.

48:28 And hopefully we can help you with them. And make sure to tell us how to reach you. You can send us a voice memo at HIBT at ID.wondery.com or call us at 1800-433-1298. and leave a message there, and we'll put all this in the podcast description as well. This episode was produced by Carrie Thompson with music composed by Ramtina Rablui. It was edit by Andrea Bruce, and our audio engineer was Cina Lafredo. Our production staff also includes Alex Chung, Carla Estevez, Casey Herman, Chris Massini, Ramel Wood, Sam Paulson, Diva Grant, and Elaine Coates.

49:07 I'm Guy Roz, and you've been listening to how I built this.