A Conversation with Christopher Payne, President of DoorDash.

A Conversation with Christopher Payne, President of DoorDash.

DoorDash is a remarkable business. Founded in 2013, the business now has millions of  monthly active users, across 27 countries, who utilise the services of millions of Dashers on the platform to get, ‘restaurants and more, delivered to their door.’ DoorDash is empowering a whole new economic model – In the period from Q1 2020 through today, the platform has generated over $70 billion in sales for merchants, and over $25 billion in earnings for Dashers.  It took 7 years for DoorDash to complete their first billion orders (from founding through October 2020), it took 10 months to complete their next billion – the scaling continues – in Q3 2022 alone, DoorDash delivered over 430 million orders. DoorDash IPO’d in 2020, and is regarded as one of the most valuable consumer businesses on the planet.

Christopher Payne is the President of DoorDash. He served as COO from 2016-2021, and prior to joining DoorDash, he led the North American business at eBay, ran development of MSN Search (now Bing) and mapping (Virtual Earth) for Microsoft. He also led Amazon’s expansion beyond books into video, electronics, wireless, PCs and software. He is one of the world’s most accomplished technology leaders.

In this interview, I speak to Christopher Payne, President of DoorDash. We discuss the characteristics of entrepreneurial businesses, how to lead at scale, how to compete and the importance of putting customers at the heart of everything you do.

Q:  How did your first job teach you about business? 

[Christopher Payne]: I started at McDonald’s when I turned 16 – I grew up in a small town, Owensboro, Kentucky, and they were opening a new McDonald’s out at Towne Square Mall.  We didn’t have a ton of money growing up, and so I wanted a little bit of extra money, and I was really excited about it.

One of the things I learned is that it was cool to save up money, I saved up for my very first purchase that I made, which was a VCR believe it or not, and I loved that thing, it was a great sense of pride I got in buying that. That was one thing. Number two was that McDonald’s was my first real exposure to a real business, and this McDonald’s was incredibly well run, professional, trained.  They were drive-thru, counter, grill, I became a trainer there.  It was a fun atmosphere, fun to work with others, I got to learn a lot of new things and knew right then that I wanted to work in business.  Anyway, roll forward 30 years, 40 years, I now am talking with executives at McDonald’s, who are one of the major partners of DoorDash. And I got to tell them the story of how I started in my work career, as millions of other Americans have done, but it was a great beginning for me.

Q: What characterises entrepreneurial businesses?

[Christopher Payne]: I benefited from working in software and technology for my entire career. I started at Microsoft after college – it was an incredible experience, we were building the future, making things, pioneering things, building the early internet, creating enterprise software, and moving towards that goal of one computer in every home. That ethos… that sense of invention, innovation and revolution continued with me through everything I’ve done. You see this at companies like Amazon – they invented AWS! It’s impressive, the core capabilities of the company are only tangentially related to that, and AWS is now powering a revolution in cloud. With DoorDash, we’ve found a way to empower local commerce in a decentralised way; we’ve built entrepreneurship into our platform, into our technology.

Entrepreneurial businesses innovate, change, evolve and meet customer needs… it’s about creating things that people value and love.

Q:  Can you be entrepreneurial without being the founder?

[Christopher Payne]: You can be entrepreneurial without being the founder, but founders, their innovations and their long-term visions are the drumbeat of Silicon Valley mentality. Tony wants to empower local economies, it’s not just about restaurant delivery. He wants to help everyone on Main St, and that’s a multi-decade vision. I’ve worked for a lot of companies led by strong founders. I worked for Bill Gates at Microsoft for 15 years, Jeff Bezos at Amazon, and now Tony at DoorDash. I like working at a founder-led company – it creates the conditions for entrepreneurship.

Today, I operate a multi-billion-dollar business, but I love our founder’s framework and operating in that mode. My expectation is that everyone innovates, everyone is entrepreneurial, and everyone figures out how to meet customer need and everyone builds. Technology now allows us to experiment too – and try small things to give us signals without having to bet the whole company on a single idea.

Q: How do you balance the needs of stakeholders with the freedom of entrepreneurship? 

[Christopher Payne]: I’ve worked in a lot of different types of business in my career, and you can certainly get tied in knots when you want to create a great ‘thing’ but can’t figure the business model to make it work. I’ve been faced with this dilemma many times in my career, but one iconic example was at Amazon where I launched new businesses in video, electronics and ended up running toys, kitchen, and many key lines. I didn’t know anything about retail or eCommerce, but I knew about software. My approach was simple- if I didn’t make those businesses profitable, I couldn’t’ innovate. Nobody will fund innovation in perpetuity – you need to make money; you need to deliver value to your customers.

At DoorDash, we want to do a fantastic job of delivering from point A to B, we want to do that at high quality, and make it affordable. We want customers to like us, Dashers to like us, and merchants to like us, that’s our job. But….. and this is important… we need to make it work economically for the company so we can continue to do it in the future.

When people ask me whether we want growth or profit, I say yes! Both!

Q: How is DoorDash meaningfully transforming employment?

[Christopher Payne]: I started at DoorDash seven years ago, and one of the craziest statistics is that we have over a million active monthly Dashers. So, a meaningful chunk of the US population is dashing every single month and week, it’s crazy. We talked earlier about our vision to help all parts of Main St, not just the merchants and consumers. We want to create meaningful work that people want and love to do

We’re creating a different type of work. The average Dasher dashes for about four hours a week, and very often they’re trying to save-up for something and use it as a supplement to their income. I was in a Lyft the other day and the driver said he was doing that job to save up to go back and forth to Hawaii to see his family. You hear these stories over and over again – people value the flexibility to work when and how they want, and we want to codify that. Employment laws in the United States are such that there’s employment and contract-work, but the laws don’t meaningfully allow for this flexible third way. Dashers should be able to access benefits if they want to work 40 hours a week- for example. They should be able to work across companies. We believe that flexibility should exist, and that benefits earned should be portable and proportional to the amount of work you’re doing on each platform. It’s a tremendous opportunity for the global work-system.

[Vikas: But what happens when you automate those jobs away?]

[Christopher Payne]: I can see the potential of robots and drones doing deliveries and stuff like that, I’m super bullish on the long run – but I don’t think it impacts jobs in the short-run. The first 100, and last 100 feet is impossible to meaningfully close through automation today. Humans are just that versatile. We’re creating more new-work that humans are great at – and will be for many years to come.

Look at it this way, there’s practically no friction to sign-up to DoorDash as a dasher. If you have a car or bike, you can start dashing in hours, and earning money. You can use it to complement other work that you have and fill the gaps so to speak. So many people are doing this now, across so many businesses, that we have to codify it properly into law.

Q: How do you stay competitive in a market where- excuse the pun- but others are trying to eat your lunch?

[Christopher Payne]: This is an ultra-competitive category, and that means that there’s real value being created. If nobody shows up to the party, it’s probably not a great party.

When it comes to staying competitive, I’ve always focused on the customer and worked backwards from there. That’s been true of everywhere I’ve worked – Microsoft, Amazon, eBay and now DoorDash. If you keep doing a better job at meeting the customer, it means you’ll get more money, more advantage, more retention.

When I first arrived at the company, we didn’t have much money, and part of my job was to do that – and we raised a lot. People don’t necessarily remember the period from 2016-18 however, when it was really tough sledding for us financially – but that made us disciplined and made us focus on the things that matter.

One thing we do which surprisingly few companies do well is listen to our customers and merchants. In the period from 2017-18, a lot of merchants were asking us to expand across the United States to give them national coverage. This was scary, we didn’t have much money. Finally, however, we leaned into it – and Cheesecake Factory was our first national merchant. We now cover all of their stores, and the last one we crossed off the list was in Puerto Rico! This expansion taught us a surprising lesson – that being that the economics of DoorDash work better in smaller geographies than dense urban environments. This wasn’t some strategic genius move on our part, but rather, a focus on our merchant. Today, we cover 95% of Americans.

Another thing we had to focus on is quality. People are hungry, they want food now. It’s a very demanding use case. It’s also the highest frequency order case I’ve ever worked on. We have customers ordering many times a month, sometimes many times a week. It’s an opportunity to get it right- or wrong. We have to focus on logistics of quality to retain our customer, not marketing expenditure. That formula led to our success today – and I think will be the recipe for our future. We’ve taken the lead in a category that is evolving, dynamic, which can change and we can’t rest on our laurels.

Q: What does success mean to you?

[Christopher Payne]: I feel very blessed in this life. Work is not the be-all and end-all for me. It never has been. My family is the most important thing to me, and I talk a lot about that to my employees. It actually makes you a better employee if you have your balance right between work, family, passions, studies, all those things. You need to feel connected with life and I feel very grateful to have been able to achieve balance in my life. That’s one of my definitions of success. At the end of the day, I’ll always look back and I’ll never say, ‘I wanted to work more…’ right? I’ve been blessed to have had a fun, successful career and it’s really important for me to state that luck played a huge part, right?

I showed up at 1 Microsoft Way at this company, looking for a job. They had just shipped Windows 3.0 and were about to become the company of the decade, and one of the most valuable companies on the planet. I was laughed at when I went to work across the lake for a book-seller. I wanted to learn, have fun, and build things. That business was Amazon. There have also been plenty of misfires along the way- my time at Tinder, and getting fired after six months was a disaster, it wasn’t fun. But… it still met my framework, I was taking risks, trying new things, some work, some don’t… that’s learning… that’s success.

I also feel it’s a success when we make an impact. Nothing makes me happier than when I sit down at dinner and people tell me about their DoorDash experiences – when people tell me how much they relied on us during the pandemic, or how they’re using us as a source of income to supplement what they’re doing. That just makes me incredibly excited as do the conversations I have with restaurants who have expanded because of us.

In recent years, another definition of success for me has been trying to help the next generation of employees and- to the best of my abilities- pass on the things that I’ve learned. I spend a lot of my time now trying to do that. I take great satisfaction in that, and it’s fun.

Thought Economics

About the Author

Vikas Shah MBE DL is an entrepreneur, investor & philanthropist. He is CEO of Swiscot Group alongside being a venture-investor in a number of businesses internationally. He is a Non-Executive Board Member of the UK Government’s Department for Business, Energy & Industrial Strategy and a Non-Executive Director of the Solicitors Regulation Authority. Vikas was awarded an MBE for Services to Business and the Economy in Her Majesty the Queen’s 2018 New Year’s Honours List and in 2021 became a Deputy Lieutenant of the Greater Manchester Lieutenancy. He is an Honorary Professor of Business at The Alliance Business School, University of Manchester and Visiting Professors at the MIT Sloan Lisbon MBA.