DoorDash is
an on-demand food delivery company for restaurants. A lot of restaurants want
to offer delivery, but the owners do not want to handle all of the logistics
that go along with offering the service.
So, DoorDash
offers an easy way to allow for delivery from your favorite restaurants.
That’s the
first thing small businesses can learn from DoorDash:
Fill a Demand or Solve a Problem in a Niche
Businesses
need to do two main things to be successful:
- Fill demand. Is there a demand for your product or
service? - Solve a
problem. Can your
product or service solve a problem?
DoorDash
isn’t revolutionary, but it does solve a problem in the restaurant industry.
DoorDash takes care of all the delivery logistics, and restaurants do what they
do best: make food. It’s the perfect pairing, it fills a void and it
allows even small restaurants to be able to offer a new way to sell their food.
Find Ways to Scale Your Busy Early On
A lot of
companies have tried and failed to offer restaurant delivery. The key issue has
been that they have been unable to scale their operations. DoorDash took a page
from Uber and has decided to offer a side-gig opportunity.
There are DoorDash driver resources to help users get started, and this
means less overhead for DoorDash.
Since people
from across the world can drive for the company, it has been very easy to
scale. Offer drivers the opportunity to make money, and restaurants see no
reason not to offer delivery through DoorDash.
It’s easy to
expand when DoorDash makes it easy for drivers to apply and start making money.
Raise Money to Grow Operations
DoorDash is
valued at $7.1 billion, and the company has raised $400
million in its most recent round of funding. The funding will allow the company
to continue offering its service to more cities and scale their efforts.
But there’s
also something interesting: profitability is not the company’s main concern.
Profitability
is key for many small businesses, but you can also learn something from
DoorDash. Sometimes, profitability comes second to scaling operations. When a
company has a large market share, they’re able to demand higher prices, cut
back on costs and receive discounts.
Amazon did
this very well, and now Amazon can demand discounts and turn billions of
dollars in profits annually.
Raise money
to expand operations and offerings, and when you’re large enough, you can
really focus on profit margins.
DoorDash
isn’t perfect, but the company can teach us a lot about how to scale a
business. You can learn one last thing from the company: competition is okay.
GrubHub already owns a massive market share, and Uber is growing their UberEats
operation.
But DoorDash
continues to grow, so there’s no reason not to innovate and continue growing
operations. Extensive testing of pay models, transparency and consistency has
allowed the company to overcome driver dissatisfaction and grow operations.
There is
room for more than one big company in a niche, and it can be healthy for
business if you can differentiate your operations from others.
