Andrew Munday (1st employee @ DoorDash, founder at Local Kitchens)

Hey everyone, this is Erik Torenberg and you're listening to Execs by On Deck. Execs is a show for founders, operators, and leaders who want to understand the playbooks, frameworks, and tactics that leading tech companies today have used to scale. Our guests are tech execs in key roles at top tech companies who share their hard-won, earned secrets on how to scale faster. Andrew Munday is the co-founder and COO of Local Kitchens, a digital food hall. Before that, he was employee number 1 at DoorDash. In this episode, we talked about strategies for supply acquisition and retention in marketplace, how to iterate manually before you have a robust product team, how to hire well, how to scale culture, and other lessons learned building DoorDash and Local Kitchens.

Andrew, for people who may not be familiar, can you explain what Local Kitchens does and then a little bit about how you came to start it?

Yeah, so Local Kitchens is a digital food hall. So some of the motivation was around ghost kitchens. We basically started interviewing merchants during the pandemic and asking what their problems were. And this was kind of unrelated, but a lot of them were talking about expansion and how hard it was to expand. And we asked, you know, why don't you just use ghost kitchens? Isn't that supposed to be the answer? And they said, you know, that's really just a building and equipment. Like, our biggest pain point is actually running the kitchen. And so we basically told them, oh, that's what we do. And then we had to figure out how to actually deliver on that. So the idea was, you know, if they essentially licensed their brand to us and we do everything for them, We could help expand these incredible brands in different cities. And then the consumer side, the strategy is to really expand to the suburbs where selection is not as good, right? In a lot of cities, you have some of the best restaurants, highest quality, and then in suburbs, there's kind of lower quality, maybe like fast food type options. So that was one strategy. And then we kind of realized the opportunity to put, you know, 8 to 10 different brands inside of one kitchen. There's a lot of economic advantages to that. And then also on the consumer side, there's mix and match. So if, you know, you go with your family and one of the kids wants mac and cheese and someone else wants a salad, you can actually get uniquely different items. So, so far so good. We're about 2 years in, working away.

Awesome. And we originally met at an On Deck event, the On Deck community. Fascinating to see how far you've taken it. Previously, among other things, you were the employee at DoorDash. I'm curious just about the first employee idea. At Local Kitchens, how did you think about who you want to be your first employee? And when you think about founders in general, how should they think about who should their first employee be? What is the right profile to look for in a first employee type? Why don't you talk a little bit about that?

Yeah, I actually kind of feel like the environment is set up that you'll attract the right person. You can definitely miss on hiring, but you're offering like basically a ton of work and a low salary and a ton of equity. And so that just happens to, I think, attract people that have a lot of grit, don't care about title, don't care about a lot of the things that don't matter. So I think you're lucky in that sense. Now, it's really hard to find those people. It depends on experience level. I think very rarely you'll find someone with a lot of experience that wants to work for a low salary, but generally looking for all the classic things, just very scrappy. I think for me at DoorDash, like, I was not experienced enough in startups to be thinking about like TAM and margins and all this stuff. You know, I just figured Tony's got that covered, right? It just wasn't even in my train of thought. So I really just looked for like culture, opportunity, and like autonomy.

Yeah, it is interesting. I was first employee at Product Hunt and first employee, so The cynical take on being first employee is you're going to work almost as hard as the founder, or maybe even, let's say, even if you worked half as hard, but your economics are like, your equity is up to 50x worse potentially, and you don't make a lot of money. That said, the positive take is you get to learn a ton and you get a ton of exposure and ability to scale with the company. Like your experience, if you're a first employee at a place like DoorDash, you can then go out and do anything you want and you have the reputational and the financial resources to do so.

Yeah, it's such a good point. And I feel like I'm probably uniquely positioned to comment on this because I've founded companies and I've been first employee. So I have actually the perspective of both sides. And I think when you're that first employee, I actually never had that mindset. It's just probably not who I am, but I just felt really lucky to be on a company or at a company that was doing really, really well. But you can definitely think that, but I just think getting product market fit is just so fucking hard. If you haven't done that, I don't know that it's worth 50x or whatever, but it's not about you work the same hours or whatever. That's just not the right way to think of it. And there's also different stresses. At our company now, there's so much going on behind the scenes that people just don't even know about that John and I are texting about every day. could be big, big things, right? And so until you actually do it, you don't know. And then monetarily, I mean, I made more—

Totally.

Money at DoorDash than probably a lot of founders ever made or will ever make. So it's really just about being on a winning team. And for me, I don't have ego about founding or not founding. My calculation is more culture. Like, I just thought it was very hard for me to find a company the culture that I loved. And so it would be easier for me to start a company and control the culture so that I can be in an environment with the culture that I like. And so that's kind of my only calculation there.

Yeah. You mentioned a few things I want to go into. Product-market fit and then culture. Let's go product-market fit first. Some people use the formula that the Superhuman guy, CEO Rahul, sort of uses around or popularized around sort of how many people would be Upset if they can no longer use your product. What is sort of your approach to product-market fit, to evaluating whether you have it, et cetera? Talk about that.

I think it's like 2 things really. One is it slaps you in the face. It's very obvious, right? People are saying crazy things. They're wildly enthusiastic. They're using the word love. They're writing in caps, this kind of thing. makes it really, really obvious. And then the other thing, I think Paul Graham might've said this, I could be wrong, someone who wasn't me said this. Basically when your operations or like the delivery of your product is like really poor and people are still coming back, like in DoorDash days, I think 70, 80% of our orders were late and like very late. Like we quoted 55 minutes and we delivered it in like 90 minutes, right? And luckily we didn't know this because we didn't have dashboards set up yet. We found this like with historical data and we were kind of like, You know, shit. I don't think that would've helped actually, 'cause we were still pretty stressed and working very hard. So it probably would've just made things worse. But yeah, when you're just operationally terrible and people are still coming back, that's not gonna last forever. You need to fix that. But that just makes it so obvious.

Yeah. Talk a bit about culture because, you know, DoorDash obviously had a very exceptional culture. You've consulted with some startups in a culture capacity, and then you're also, Scaling your own startup and you've thought a lot about culture. What is your sort of approach to company culture and how should founders, what can founders learn from it?

I think all of our purpose and our meaning is community. I think humans, I mean, this is On Deck, right? The whole thing is community. That's why we're here. There's small communities and big communities and ultimately we're all just trying to figure out what community gives us the most energy and that we love the most. And so a startup is just a community. And so it's super important that you write down and you live the values of the community so that people can either opt in or opt out. So I was really lucky at DoorDash. I came in, they had this big long sheet of, they called it culture, but it was a lot of different things. It was like how we work and you should have one-on-ones with your manager and stuff like that. But it was very clear that things like first principles thinking, bias to action, being data-driven were what was valued. And so I immediately felt affinity and felt like this is the place for me. And then I got to live it, right? Tony gave me complete autonomy. I had a million bad ideas. I got to execute all of them and I had to measure them and do postmortems and things like that. But it's important to write it down and make it very clear to everyone, especially when they join, like, and in the interview process, this is what we stand for. And if you're not into this, like— then this is not the place for you. So yeah, some of the other places I've consulted, that's part of the thing is like, I feel like founders have in their head how they want people to work, but it's not written down and they don't know how are they gonna live it. Or it's like, okay, we wrote it down, but then what do we do? And it's like, for us at our company, there's a section in the all-hands where we talk about a cultural value every single month. When we set our monthly goals, I'll pick one and say, hey, the theme for this month is like, details-oriented or first principles or whatever it is. And so you actually need to map out in a given week or a given month. And then I'm just really fortunate that it comes natural to me. I'm always yelling about culture from the rooftop and anytime there's an email, I'm like, this reminds me of cultural value number 17.

Yeah, no, totally. Reiteration application. Going back to the first employee thing, it's interesting because especially at a fast-scaling company, there's a tension as to Will the employee scale as fast as the company does? So what's been your experience there, one, as an early employee yourself, but then also seeing everyone around you in terms of how should founders think about measuring whether employees will scale or not? What should people keep in mind here?

Yeah, that's such a good question. I actually think for both sides, for founders and for early employees, because as an early employee, the company's moving Especially at DoorDash, and it's like a land grab. People are deciding, should I get into product or should I be the GM of this market? And there's too much opportunity, whereas at a big company, there's probably one path and you drive towards it. And so the reality is most early people won't scale. I mean, I left DoorDash at 550, 600 people. It just wasn't a fit for me anymore. I think we probably could have found new vertical type things for me. But at that scale, you can't operate as recklessly as I prefer to operate. It's just not appropriate for the business. And so part of it is for the employee to understand who they are and have frequent conversations. For me, Tony always knew I wanted to start a company. We talked about it almost every week. He always aligned me with projects that would get me to be thinking more as a founder. And then when I came to him and said, hey, I kind of want to try to start something, He was super supportive. He let me work at DoorDash part-time while I was meeting with people and thinking of ideas. And so I think it's important to be collaborative. There are definitely the hard moments where at one point we hired our COO, Christopher Payne, and I was definitely thinking, I wanna be the COO of this company, right? But I had no idea, right? I was 31. I don't know what it means to be the COO of a 6,000-person company. And it was not only something I was Like wildly unqualified for, but I think it was something that I would hate. And so I think you get too attached to like, this is kind of my company. And so I think on both sides, you really need to plan for it and respect that these things scale really quick and there's different stages and you don't have to feel like you need to be there forever. And you can still be best friends with everyone.

Yeah, that's really well put. Talk a little bit about how the ops team scaled at DoorDash and just give founders a little bit of, And of course it depends on the company, et cetera, but a little bit of insight as to how to think about an ops team in terms of how it grows over time.

Yeah, I think some of the fundamental things for us, we're very product-minded in the software world where I always like to say software's like magic. You can push something out and it can create 100% improvement. So we were all very product-minded and it was important that we interfaced directly with engineers. We didn't have PMs. in the early days. And then the other thing is really just about hiring and firing. Those are just so crucial and they were crucial to DoorDash. We were very, very good at hiring and getting the best talent. And then we were very good at letting people go and making tough decisions. You have the different spectrums of people. You have the geniuses that are kind of assholes and you're really tempted to say, man, they're so smart, maybe we should keep them, but they're pissing everyone off and there's a limit.

Right.

And so figuring out who to let go and who to keep can be tough. And then I think structurally, just the data rigor around accountability and measuring. I mean, in our weekly business review, there was probably 8 of us that were very close and it was tense. I mean, we were ready to say, Erik, your team is trash and you're not hitting your metrics. And there was an underlying love and respect, so it worked really, really well. You had to bring your numbers and be proud of them and hit them. Otherwise, we were going to eat you alive. It was good.

You're saying, of course, you weren't ready to be the COO, et cetera, at that time of a 6,000-person company. What did you appreciate about what the skillset that person had that you hadn't quite yet developed yet? Or how do you think about just even the growth, your growth as an ops leader in terms of the stages or the type? And part of it's just experience, but But also part of it's like, how do you think about the repertoire or the skill set?

I think the leap is strategy. Strategy is a broad word that most people I think don't even understand. And I remember Tony telling me in certain circumstances, you're missing the forest from the trees. And I didn't even really get what he was saying. And Tony had said, we need to hire a COO. I said, well, can you list out what I need to do to be that person? And he's like, I can't. Like, I don't even know what that person is. And so that's hard to hear. You guys have been brothers and he's saying, you can't do it. And I don't know to tell you like how you can do it. And I'm like, I can do anything. Just tell me what to do and I'll do it. And I was just being naive. And then I remember when Payne came in and I was explaining to him how our support team worked. And at DoorDash, support's very complicated. There's merchants, there's customers, there's drivers, emails, texts, phone calls. It's very complex. It's a big line item on the P&L. And I was describing really tactically how everything was working and I could see his head was spinning and he was confused. And that was a moment for me where I felt like I kind of got it. I was like, I'm not strategic at a high level, I am tactically, I can figure out problems, but I'm not thinking in the next 3 years, what does this group look like? And I haven't even done that. And that's where he's at. And that's his value. And so I was lucky to be alongside him for a while, but it was the kind of thing that I don't think anyone could have explained to me. I kind of just had to see and be around it and see like, oh, that's the gap. These people are different.

And to pull that thread a little bit, it's just, it's the sort of long-term thinking or more like putting, being able to zoom out and just think about the entire business or like say more a bit about that.

Yeah, I think thinking about the entire business, how all the pieces relate to each other and then being really first principle, right? So in support, you're thinking about optimizing turnaround times and We called it our task-to-order ratio, what percent of orders require a touch or something like that. But then you could think about Amazon, they're not even thinking like that. They're just thinking about customer experience. And a lot of it is actually automated. And so it's really thinking, how do we evolve? And what does this look like? Not even in relation to what we have today, but just— What could it be? And then I think thinking of scale, like super scale, like 10x scale, not like how do we handle this next month? I think it's just so hard when you're in it and you're super tactical. Like, I'm just trying to get prepared for tomorrow. And so it's tough.

Yeah. And so what's an example of something maybe at DoorDash where you were serving at some local level and then had to think about how to serve that at a much more scaled level and you had to change kind of how you even thought about that function? Is there an example that comes to mind?

I think account management was one of the toughest things because we were getting inbound requests from merchants and I thought about account managers, but it's like, do you need support agents who, what's the nature of these requests? Is it transactional? An account manager's salary, do they actually need to be a relationship? minded with these people. And like, that was a function that I feel like we— it took us a while to figure out. And there's like different levels of merchants. And part of it is I was just doing too much, you know. I was doing like— I was spread across like 7 big groups, like HR, recruiting, legal, supply, support. And so you just don't have enough time to devote to one of those, and you just don't end up thinking about it.

Totally. One of the things that you've done in your consulting capacity is introduce a new level of business rigor to the company, whether it's certain systems or processes or cadences that most companies would benefit from. Paint us a picture of some examples of what that looks like. If every founder had the benefit of being able to have you come in and swoop in for a couple months and set some systems up, what are the things that you think are most non-obvious or that not all founders do but they should?

Yeah, it feels obvious to me, but I think The weekly business review. I did this at Dutchie's, a place where I invested early and then I ended up consulting full-time for 2 months. I actually worked there in their office. And a lot of people just kind of work and then they might track some top-line number like GMV or something, but they might not be paying attention to take rate or what actually matters of GMV, right? Let's say you're tracking GMV in Dutchie's case, but at the time, we were getting paid from stores like a flat rate. So I'm like, why do we care about GMV? Even if it goes up, who gives a shit? We don't make more money. So understanding what metrics matter. Basically every Monday, my belief, and this is what worked really well at DoorDash and everywhere I've been, and this is what I implemented there, you have essentially some version of the P&L where you're looking at Sales, like order volume, you're looking at all your COGS. Ideally, there's a leader in charge of each line item. You look at the week, you look at the previous week, and then you look at the trailing 4 weeks. And each person— and there's a goal also. And each person is responsible for reporting on if they hit that goal, or if they didn't hit that goal. And then you're just asking them basically why, why, why. And if the answer is unsatisfactory, then they need to come up with a plan that night. If that plan sucks, then they need to come up with another plan by the morning. And it's just this kind of extreme accountability thing, especially for these businesses like DoorDash where you're moving your unit economics 10 cents every quarter, right? This is what you need to do for like 7 to 10 years to actually like make money in a business where everyone's telling you you'll never make money. And so that structure is very, very important, you know, and it's something that like we do today at Local Kitchens, and it makes everyone better operators. Like people in our kitchens understand our P&L. And even in our all-hands, we took this from PayPal. We heard that Peter Thiel, when they IPO'd, printed out the P&L and was reading it to people. We do that in our all-hands. Everyone gets a printout of the P&L, and then we go through it line by line and ask people, do you know what prime margin is? Do you know what gross margin is? Okay, well, here's what it is. You got to know how we make money. You got to know how we lose money. That's how you can help us solve problems. If you're the recruiting coordinator or whoever it is, if you know all this stuff, then you can help make the business better.

Yeah, that's really interesting. And so what's important in terms of getting the weekly business review right? Is the key part just that everyone presents and there's public accountability? Everyone who owns a metric presents and they get grilled in front of everybody? It's almost like The famous YC office hours where everyone feels all this pressure to hit their numbers and then also has to explain themselves.

Yeah. It's funny you mentioned that. I feel like that is the main value of YC is just every week you have to send a report and it says you either tell them you suck or you don't suck. Yeah. So part of it is just accuracy. When you come to that meeting, you have to prepare for it and every number needs to be accurate, which at an early stage startup, it's not a given that numbers are accurate, right? You have to actually do the work to make the calculation. And then the other thing, yes, it is the accountability. You're in front of a group of people, your peers. And then the other thing is collaboration, right? All these numbers are connected, so everyone's helping each other. And then the last thing, I guess, is it's the leadership group, so it's kind of the message from that meeting goes out to the company, right? They're all leading groups. And so they can tell their groups, like, in which direction to march and bring some of that. The other thing I would say is I think making it open door. Like, anyone should be able to come in and learn and participate.

Yeah. One of the things that you worked on was supply acquisition and retention. And you also worked at, or helped start FutureFit, of course, which is a service that helps you get, you know, personal trainers digitally. Talk about what you learned about at the DoorDash experience, just how to acquire supply and how to retain supply, maybe on the driver side. And then maybe you could also talk about how you thought about it at FutureFit.

Yeah, I think it changes a lot at different scales. When we had— I think my superpower is always gonna be zero to one in the small scale. There's someone running supply now at DoorDash, this guy named Cody, who's just Brilliant, super smart, and I think he's doing quite well there. For me, it's about measuring and connecting, right? So I'm always looking at retention week over week, month over month, and then really defining it as number of deliveries that they've done per month, right? Because at some point you might not care if they just do 1 here and do 2 there. But early stages at DoorDash, I had every single person's cell phone number. We paid for— I think we paid for one of the guys, like his Dad had a funeral and didn't have money for it, and we're working out of a house, and we just knew everyone so that if it was raining, I could just call people and say, can you please drive tonight? We really need the help. And they would do it because we had their back. And then beyond that, when you hit scale, you actually need to look at some of the behavioral mechanisms like incentives and these different things, like the way DoorDash works today, where people can accept and reject and all that. So early stages, I think you're really trying to build affinity because you're gonna be so bad at operating that people might get mispaid and there might be other errors and you need them to be able to come back. And then at Future, it was kind of the same thing where people were bought into something really new. They're able to actually build product. Trainers are actually giving feedback to engineers, which is something that most of them can't do. And so I think that's a really exciting opportunity, but it goes to kind of what we talked about earlier. There's a certain point of Scale where when I left at DoorDash, you know, it was 60,000 drivers. That was like not the right problem for me to be solving. You know, I just, it wasn't my skillset.

Yeah, totally. You mentioned earlier that at DoorDash, Tony gave you the freedom to do a bunch of things and try a bunch of things. Talk about some of the things that you did that worked and some of the things you did that didn't work.

Yeah, different scales. I'll go on the culture side. I don't know why I thought it would be fun to bring impersonators in. So when we were— we were like 13 people and everyone was really stressed. I mean, working 7 days a week, like 10 AM to 2 AM, like just really, really crazy. And so I brought in this Obama impersonator and he was like pretty bad, but it was kind of funny and it was kind of weird. And, you know, Tony just like rolled with it. And I paid him $500, which, you know, back then, like— That's a lot of money. That was a lot. Like, any amount of money was just like a lot. We were very frugal. And then many years later, like 3 years later, this was before Trump was president, I brought in a Trump impersonator and I had Tony debate him. And this was actually kind of a big fail because I told the company there was gonna be a big surprise, and I later heard that people thought we were getting acquired. And so I was like, oh, there's a big surprise on the 3rd floor at this time. And Tony was like debating this Trump impersonator and like no one was really laughing. And it was just kind of a big flop, but I think people appreciate that I'm always trying to make the company better. And so they appreciate the intent. And then on the ops side, I think one of the most interesting things was around order placing. So we did the non-partner thing where we would place orders at restaurants that maybe didn't know us, and we'd pick 'em up and we would test demand and see if there's volume. But to place that order, you actually had to call it in. And so this really evolved from our support agents actually calling it in. These are support agents in Palo Alto. Eventually it had its own queue, and I had a group of contractors in the US calling it in, but even that ran into some scale problems. And then one day we needed some extra bandwidth, and there was a couple people in the Philippines that, like, a friend of a friend knew, and they called in some orders, and then they started calling more, and I flew out there to I was like, I wanna check this operation out and see the viability. And some people internally were like, you're an idiot, you shouldn't do this. Even, I think Tony even was like, what are you doing? And I was like, oh, I'll be back in like a week. Let me just see if this is gonna work. I took one of our product guys out and we went out and there's people in this house, they're outdoor, there's like little MiFis everywhere and they're just pounding phones, calling it in. And they're like very good at it. Their error rate was super low. So on the spot, we went and rented an office, we bought computers, Before we knew it, we had like 400 people performing this function. And now I think it's probably like 3,000, 4,000 people. So that worked really well. I think you really need to stick with first principles thinking, have a hypothesis and have like an outcome metric in mind. And then just, I'm like Tony, I'm an extreme optimist. Like I just, probably to a fault, I just, there's always hope.

Totally. Talk about the WeDash program and what broader principles you think might be applicable for other founders or other companies.

Yeah, WeDash is sweet. You know, when I joined— so WeDash is where every employee at DoorDash drives once a month. When I joined, you know, the founders, we all had to like do deliveries all the time because we just didn't have enough drivers, right? Or an order would be messed up and someone would run out of the house and go do a delivery. I remember on my first day, I did a huge catering order to Andreessen Horowitz, and I was trying to tell everyone, you guys all live around here, you gotta use this service, and I was soaked in rain, no one was really listening. But that was really valuable 'cause I actually learned, hey, catering, it's very different than our core business, and I actually don't think we should do it. We need different product and software and ops. And so we kind of learned, yeah, this is kind of a distraction. So we knew how valuable it was to drive, and then as we got bigger, I really formalized the process and we put it in performance reviews. And I said, look, 'cause I was running people and recruiting at the time and said, if you don't do this every month, you can't get promoted. And I was actually pretty aggressive with it. I would send a list every month of all the employees who drove because we were pretty competitive. So we would say, I would track your deliveries per hour, which is like your efficiency. And, you know, we would kind of all talk shit to each other, and then if someone didn't drive, I would write in caps in the cell, did not dash. And so I basically, like, call people out in front of the whole company. It was really effective. You know, I think people saw the value that, like, the best employees were driving a lot, right? They were, like, doing way more than what was required because they had just pushed something and they wanted to see how it behaved. And I also think in the business role, it's an incredible opportunity to not be at your desk like all day every day. Like, you get to go out into the field. There's actually— I remember we signed this company Marketa for these like charge cards, and their head of BD, this woman Dorothy, I basically told her, if you want to work, especially for the charge cards, I was like, if you want to work with us, you need to do deliveries because otherwise you won't understand at all how we're using your product. And she came out and I gave her a shirt and we did deliveries and she totally loved it. And we're still friends to this day, probably because of that relationship. So now even at Local Kitchens, we have We Support or We Expo or We Cook, right? It's the same thing. You have to be in the details and you have to be an expert. In product, that's the first question. Did you talk to the user? Did you talk to the cook? How do you know? Okay, well, if the answer's no, then shut up and go to the kitchen, figure it out.

It's really interesting because of course Paul Graham has the famous thing, do things that don't scale. That's typically applied to founders, but it's cool to see that even at a scaling or scaled company, there are employees at scale who are able to talk to their customers or get in the details like that. One thing that's striking, Andrew, talking to you is that you have a strong almost military, I say this in a positive sense, focus and sense of rigor and sense of accountability and you implement that in your teams. I'm curious how you think about recruiting an employee base that is down for that because the critique is that employees are getting softer and softer and expecting more and more and 2022 is different than 2012. I'm curious how you've seen that change, if you think that's overblown or how you recruit based on that. It sometimes can be not seen well if you're like, we're a hard-charging culture. There are negative stereotypes that come with that. What's your take on that?

Yeah, it's a good question. I mean, I think in this environment it's a great competitive advantage because if— I think all the companies that want to work hard, they will come out on top. I just think this has never changed. If you're starting something new that requires a lot of work, this is just what's required. And then I find myself in a lot of operationally intense businesses. I was joking about this the other day. We had an issue with one of our partners where we had to go to their facility and actually pack a bunch of food, like, basically, like, immediately. Like, our head of purchasing called me and I was like, yeah, well, let's go, like, in the next hour. And I was like, man, if I was, like, working remote from Costa Rica, like, I don't know how we would have done this. And so Look, I think every business is different. Everyone's entitled to like work however they want, right? I'm entitled to run my business how I want to, and if I do it in a way that no one enjoys, then I won't be able to attract any employees, right? And so that, that's kind of on me. But I think in a world where people, you know, the 4-day work week and all these kinds of things, like, I, I hope that all of my competitors embrace those things, you know, and I think we'll end up in very different places at the end of the road. But I think it's clear to mention, like, there's a difference. It's not about, like, being mean to people or, like, treating them poorly. I mean, hard work is great. Like, my mom still calls me on holidays and asks, are you working? Right? She wants to know that, like, I'm working hard. And so our team is a bunch of people like that who we love it. Like, when you put in 6, 7 days of hard work and you get an achievement, you feel really excited, right? There's an energy to that. And so I don't— we're not going to apologize for that. We're not going to play it down. You know, this is who we are. And I think there's always going to be people like this. There's always underprivileged people who want opportunity and want their shot, you know. And for those people, I'd say, you know, come to Local Kitchens. But everyone's entitled to their own thing. Like, I wouldn't slam one or the other, but I would say this is kind of how we like to work. And You know, that's the other thing. We're an in-person culture. We have remote employees here and there, but we index on community. And I think the greatest joy or like the best form of community or like it's best experienced in person. You know, I think it's the same reason why like if you're married, you don't wanna be remote with your husband or wife, right? You wanna like, you wanna see them every day. And so—

Yeah.

I like seeing our team. I like hugging people. I like hitting the gong. You know, I feel energetic when I walk into the office. And so, You know, it works for us and it's flexible. It's not like people are, you know, clocking in and out or something like that, but we have a very deliberate culture and we want to invite people who like it to come in. And we try to be really transparent so that, you know, if it's not for you, then like that's totally cool too.

Yeah. And that's what's great about today is that everyone can be transparent about their culture and employees can opt in or out and there's greater selection than there was prior. Talk about your hiring rubric. I know at DoorDash from another podcast you mentioned you had 8 characteristics that you look for. I'm curious if there are different characteristics at Local Kitchens. But talk about your approach to hiring and how your approach has evolved over the years as you've hired a number of people and seen, oh, I've made this mistake, or I didn't appreciate this enough, or there's false positive or false negatives.

It's similar, same structure. A similar 8 characteristics. I think I've learned to lean on references more. I mean, if it— I think especially for more senior people, 8 years plus, they're all like pretty good at interviewing, and so references are key. I mean, I wish there was a way to just only do references. Like, if I could talk to someone for 30 minutes and then just get, you know, second-degree connections, I would do that because that's kind of the most meaningful thing. I just don't know how you would— Handle bandwidth and things like that. But yeah, I mean, you want a lot of structure. I think to make it equitable for the employee side, everyone should be having the same experience and the same questions and all that. And then you keep the bar high. A lot of us use these ATSs where the rating system is 1 through 4, and 4 is the best. If you don't have a 4 on the panel, you can't make the hire. So I think just being really strict with that stuff, and it really does mean Slower hiring. There's no doubt about it. I mean, we recently worked with a sourcing recruiter and he was basically like, you're our toughest client. And it pretty much didn't work out, I think, just because our bar is very high.

Yeah. How do you think about, when you mentioned references, what is key to get right when doing references or what's sort of non-obvious about how to do those well?

That's a good question. So I usually do 3. I do someone that you reported to, someone who reported to you, and someone who you've known for more than 8 years personally. And I find that the personal one is like the most interesting. I'm asking a lot of why did they join their previous job, why did they leave, why do they make decisions, how do they make decisions, basically who is this person. You know, skills are kind of cheap, right? Any— anyone can learn skills. It's really about like Who are you? Like, who is this person? Like, if I call you and say, we got to go pack these boxes in an hour, like, are you going to go, right? Or are you going to call me and say, we got to go do this, right? So I index on the personal side the most. And then the question— I think I stole this from Mark Zuckerberg— the question I like the most for someone they've reported to, like their boss, is, you know, would you report to this person? I think that's a really good bar. And I think when I hire people, I think about that. Would I report to this person? And for everyone that I report to, I would. Obviously the content, literally it doesn't always make sense, but in general, if I was in a role that made sense, would I report to this person? I think that's the big one. And I've actually learned in the last 3 years that people are actually very honest. Even when, if I said, Erik, give me 3 references, Those people don't sandbag. They're actually very, very honest, especially if they're founders or senior people. They're just like, this is what he's good at. This is what he's bad at. So I really appreciate that kind of culture shift that I've noticed.

Yeah, that registers in my experience too. And what's your approach on when it's not a fit? Is it— well, I guess there are 2 questions there. One is when you identify that it's not a fit early, What is your reflection on sort of, was it a mistake in hire or is that— what did you get wrong on the hire or is that just part of the game? Like, you know, Keith Rabois says don't optimize for zero defect hiring because you'll move too slow. What do you think about that?

I mean, I do think it's important to hire for strength, not lack of weakness. That's a very important principle. I do a retro, I basically send out the Lever scorecard and tell everyone, like, basically email me back and tell me where you think you went wrong. I find, so like my favorite question on the culture side is, what's the hardest thing you've done in your life? And I find when that thing happened a really long time ago, like more than 8 years ago, it's just kind of can be in a past life. Like, I feel like, man, they gave me a really good example where they were grinding and then they came in and like it was just too much for them. Yeah. And so where's the disconnect? 'Cause they've done very hard things before and it's like, oh, it was kind of a long time ago. The other thing I think in early stage startups is just if you don't have the problem clearly defined, people make the mistake of they have this nebulous problem and they think they're gonna hire someone to solve it. The reality is you have more context about your company than anyone, certainly more than external people. And so how is an external person gonna solve this thing that you never solved? So I think I've seen that a lot. We've made that mistake even at our company where we hired basically industry experts, and it's like, there's 8 brands in this kitchen. This isn't anything they've seen. So those are the 2, I think.

Are there any other questions that you swear by in interviews or in terms of getting getting signal or any other interviewing techniques or tips that you've started or habits you started accommodating over the years?

I mean, I've asked the same kind of cultural questions for a long time. I think the one that I feel like I do get signal on is I always ask, what's your morning routine? And basically, what time do you get up? And John, my co-founder, is like, oh, anyone that's up at 6:00 AM Monday is just going to hire them. And it's like, no, there's more content to the interview. But on an ops side, someone that wakes up early and has structure is probably someone that's gonna come prepared to the WBR. It doesn't necessarily, it doesn't mean that they're first principles or some of the other things that we care about, but a lot of the greatest ops people are early morning people. So that's good. And people are honest too. Some people are like, yeah, I get up at 8:30. I'd like to get up earlier, but I don't really. I do this crossword puzzle and I'm like, oh God, okay, it's probably not fit.

How are you testing for first principles?

Yeah. So I try to take people out of their industry. I think it's very easy to appear first principles when you're a domain expert. But the question I like is, what's one of your favorite businesses? And then if you were CEO of that business, what would you measure? So it also shows some structure. I think what you wanna do is say, okay, well, what matters is, are we selling things? Are we making money? And do people love us? So I would answer that with, hopefully too many people will listen to this and now they'll answer this way, but yeah, what are sales? What are our margins? What's profitability? And then what's NPS? Something like that. But it depends on the business. If you choose Spotify, then maybe you care the duration that people are listening and you can be first principles on each of those little things. So I think that's helpful. But then largely it's just throwing them into problems. How would you make our kitchen display screen that cooks read off of to cook food? How would you improve that? And then it's just getting to the root of, well, what is even the purpose of this thing? And that kind of stuff.

Yeah, that's helpful. One of the things, the through lines through this whole episode has been being able to identify the right metrics and then build a structure to make sure the team is hitting them with the weekly business review. How at Local Kitchens did you figure out either the business equation, as Keita Boy likes to call it, or just the right metrics to optimize? And was there evolution there? Did you figure it out right away? Or how do you think about that in terms of how other founders can Or other just people working at companies, employees too, can be more thoughtful around how to identify the right metrics?

It took a while for sure. I think even starting the company, there are certain metrics that looked really, really bad and we wondered what's even possible to move this number down, right? And then our WBR definitely evolved. There were different versions of it and then maybe I didn't like how the meeting went and so I would go whiteboard a new version and look at some different metrics. And some of them, retention's a monthly metric, but we tracked it every week and we could see at this point in the week or the month, this is where it should be at. And so it takes a lot of tinkering and then you can see month over month if you're making progress. Okay, I think we're measuring the right things, or is it confusing for people? Do they actually understand this metric or does it make sense? Or maybe you're measuring 3 customer metrics, right? Some CSAT, NPS, and something else. And it's like, why do we have 3 things measuring the same thing? So it definitely takes time.

And then sometimes the challenge is that some metrics contradict each other. You're not sure which ones are, like, in terms of growth or margin or efficiency. How have you learned to think about those trade-offs?

I definitely think some people throw that out there. It's like the, what is it, grow or be profitable? There's a big and movement, like 6, 7 years ago. I remember Tony shouting that a lot. And yeah, that's important. I think when people say it's one of these things, it's like, no, like actually this is a business. Like we actually need to grow and we need to be profitable. So if truly there is conflict, then I think you need to be honest about that. But mostly it's just like really, really hard. It's not conflict, it's just difficult.

Yeah. I appreciate your line, your phrase, this is a business. One thing that founders have an opportunity to help instill in employees is have them thinking like owners. There are trade-offs and we have to do both. That's just the reality of the situation.

Yeah, totally.

Awesome. Well, this has been an awesome overview of lots of things. Ops, culture, scaling. Andrew, for people who want to follow you or learn more about Local Kitchens, where can you point them?

Yeah, I think LinkedIn is best. We're probably the most active on there. So yeah, reach out, you know, if you want to work hard, you want to learn about ops, we'd love to chat.

Awesome. I'm excited for more companies and cultures to look like Local Kitchen. I think it's really a strong positioning in today's market for sure. And, and something that I think a lot of people are hungry for.

Awesome. I appreciate that. Always good to chat with you, Erik. Thanks. Yeah, likewise.

Thanks for listening to today's episode. Execs is produced by On Deck, where top talent goes to start companies, find their next roles, or invest in their careers. If you're looking to start a company, uplevel your career, or navigate a career transition, I encourage you to visit beyonddeck.com. See you next time.