A short interview excerpt where DoorDash co-founder Tony Xu recounts a near-fatal operational crisis after a Stanford home football game in fall 2013. Overwhelmed by demand and insufficient drivers, deliveries were an hour-plus late; the team chose to refund all customers (costing ~40% of their bank balance) and personally baked and delivered cookies around 5am as a customer-focused remedy—an episode they cite as foundational to the company value of being "customer obsessed."
So Doordash actually almost died, I guess, after a Stanford football game in the fall of 2013.
We did.
Can you tell that story?
Yeah. So it was the first Saturday home game for Stanford football. And it was at an awkward time where after the ending of the game, everybody in Palo Alto decided to order Doordash for restaurant delivery. Normally a good thing, normally a great thing. You know, no one usually complains of too much demand, except when you have no ability to fulfill the demand or to shut off, you know, the website that kept receiving these orders when you didn't have enough drivers on the road. So that became the complication. What ended up happening was every delivery was at least an hour late, probably more like an hour and a half. It was terrible. And we also, at the time, or I at the time, could not raise any seed financing. So you got the cash going to zero. You have hundreds of customers very upset because they either received cold food or received very, very late deliveries. I remember that night, maybe 9 or 10pm, my co founders and I looking at what the refund cost would be because we thought the right thing to do would be to refund everybody. But that would take away about 40% of the bank account, which was already quite low. We took maybe 10 seconds to make the decision to refund everybody. We ended up staying up that night and then baked cookies so that we could deliver them at around 5am before everybody had woken up.
Oh, my God.
That was an early story that ultimately became the story that translated to our internal company value of customer obsessed, not competitor focused. And this is partially survival bias. But I think the, the founding team always had this desire to at least do things the right way, even if we wouldn't have made it.
Well, so what happened like the. In the following weeks, like, you know, how did you get yourself out of this sort of situation where the bank account is dwindling, yet I mean, seemingly business is booming in some sense.
Business is doing actually really remarkable. We've had a few occasions like this in the history of Doordash where business is actually going really well organically on its own, without the aid of marketing spend or discounts. Yet I can't raise a dime. And so I don't know what that says about my fundraising ability. But, you know, luckily all you need is one investor to say yes. And that's what happened. So a couple weeks after the Stanford incident in September, we raised our seed financing.
