DoorDash's Playbook for Scaling DashPass to 35M+ Members

When we first launched the MVP of Dashp pass, the economics did not work. I remember sitting in a room with CP and we're looking at the AB test results and he goes, "So, you're taking our best customers and then you're making them unprofitable and then getting them to order more unprofitable orders." At that point, I was like, "Oh, I'm I'm definitely getting fired." But that's okay. You build the thing, you learn fast, you fail fast, and then you iterate. Like, speed is a competitive advantage. CEO Tony Shu has called Dashpass the core driver of the company's relationship with consumers.

Why does it play such a critical role for customer retention? Number one is the core product offering. If you order Dash Pass, you're saving probably 80% on the fees. But the second place is growth [music] product features, the signup flow, billing, all these kind of small things, but if you add them up, that's a lot. Pricing is one of the last levers that you want to pull for subscription because it's making the product worse.

The moment you start allocating resources towards figuring out how to optimize increasing the subscription fee is the moment where I think you've lost sight of the core thing which is how do you make the product better. One of the most important things I always focus on is Welcome to Subversive, a podcast dedicated to sharing stories from the best consumer subscription apps in the world. We'll bring you lessons for how to grow your consumer subscription business, including insights and inflection points [music] that led to exponential growth from leaders at category defining companies and innovative startups.

Let's get into the show. This episode is brought to you by RevenueCat. The world's best apps use RevenueCat to power their subscription infrastructure, manage customer data, and grow revenue across iOS, Android, and the web. From any developers launching their first apps to category leaders like OpenAI, Notion, and Ladder scaling to millions of users, RevenueCat handles the complexity of monetization so you don't have to. Learn more at revenuecat.com/subversive.

My guest today is Jimmy Lou, former head of product for new verticals at Door Dash. In this episode, I talked to Jimmy about how he came up with the initial idea for Door Dash's subscription program called Dashpass. About how he and his team built a scrappy MVP to test the concept despite initial skepticism from Door Dash executives. About the results that ultimately convinced the entire company to go allin and about how Dashpass has since grown to over 35 million members and become one of the core drivers of the company's growth.

All right, welcome Jimmy to the Subversive podcast. This is an episode I've been looking forward to for months. Uh, we're going to be talking about Door Dash today and specifically Dashpass and the origin story behind Dashpass. At this point, I have to believe everyone knows Door Dash, but for those who don't, let's just start with what does Door Dash do and how did you find your way to the company in early 2016? >> Yeah. Well, I haven't had that question in probably 5 years. Um, yeah. So, so Door Dash, uh, if you haven't heard of it, is, uh, it started out as a food delivery company, uh, and then expanded into delivering other things, you know, groceries, retail goods, uh, offering pickup and and dining in reservations.

The way I got involved in Door Dash is, you know, I was actually not not looking for a a new gig at the time, but uh, you know, someone messaged me on LinkedIn and I was like, this was this was January 20 or this was actually November 2015. Uh, and I remember thinking, what what what's Door Dash? I've never heard of Door Dash before. And then I decided to interview more or less for fun. uh everyone I met during the interview process I was just super impressed by and felt like it was a a place where I could learn a ton and and and grow and most importantly have fun. And so I decided to um you know take the pay cut, take the leap, join Door Dash thinking, you know, this is going to be like a failed startup in a year or two, but I think I'm going to learn a lot. So so let's just let's just go for it. Um and then I I had actually joined as the uh uh in a GM type role. Uh, so I was running the San Francisco market and at

the time we were losing, you know, $12 a delivery doing just probably 1,500 deliveries a day, just to give you a sense of of of scale at the time. But it's where I think, you know, I cut my teeth and and learned a ton and and had a lot of fun. >> Well, what a great place to start. I mean, the San Francisco market was ground zero for a lot of those peer-to-peer companies in the early days. cuz I know that was certainly true in the Uber and Lyft wars back when I was in the Bay Area. And so it sounds like you you have this formative experience leading the San Francisco market. Obviously, Subversive is a podcast that's all about subscription app growth. So we're going to be talking about Dash Pass today, which is Door Dash's subscription product. Let's let's

talk about how your experience leading the San Francisco market planted the seed in your mind for Dash Pass and and what was the sequence of events that ultimately led up to you advocating for that idea. >> Yeah. Yeah. So, one of the most important things I always focus on is uh starting from the customer or starting from the user. So, um back in the early days of Door Dash, I used to email every every every customer who placed their first Door Dash order uh in San Francisco and I'd ask them, "Hey, how did the order go? Uh what went well?

What went poorly? What could we do better?" And that was probably the single highest like signal uh that we used to grow the market and improve our product. And so that's one of the thing and and even even to when I was uh leading product for new verticals. I would do the same thing when they placed their first grocery order. I'd email them and ask them, hey, how did it go? What can we do better? And that that being really close to the customer and having that really tight customer feedback loop is probably one of the most important things. and always where I start when thinking about building a product or or growing a growing a market. And so at the time we'd hear from customers, uh, hey, you're missing so and so restaurant. Okay, so we can go and get that get that restaurant for them. Or, you know, hey, I ordered but it was a disaster delivery. It was 40 minutes late and then it cancelled. The order

got cancelled. And I used to have I used to have nightmares about this when I was running the market. And um you know quality it it back then it wasn't what it is today, right? I I'd get nervous. I'd have friends over and I'd be nervous to order Door Dash because there's a high chance that a large order wouldn't go well. Um obviously we've come a long way but um but yeah starting uh probably the biggest takeaway and and learning from from the you know San Francisco running the market days was stay close to the customer figure out what they want and figure out how to build the product for that. The other thing was move fast.

Like speed is a competitive advantage. Um that's something that I think Door Dash has always done well and we've been able to retain you know up until post post IPO. And so um I think those are a couple things I took from the early days at Door Dash. Um what the third thing that customers would tell us is that you know this is great but it's too expensive. You know I I I can't be doing this every single day. It's like an indul it's like a it's like a luxury.

It's like an indulging experience right? And so that kind of theme of affordability carried through from 2016 and onward and and and helped um you know was one of the big themes for why uh why we created Dash Pass. >> Okay. So you joined early 2016 and in your first few months you're focusing on being the GM of the San Francisco market. I love what you said about spending a significant amount of your time just listening to the voice of the customer. I think this is one of the things that separates the great product leaders from the average product leaders. And it's so simple. It's like hiding in plain sight. It's it's easy as a product manager, a product leader to get obsessive about metrics and dashboards and growth rates, but it all stems from the customer experience. And

so, you're spending a lot of your time emailing every single customer who's made their first Door Dash order in the San Francisco market. And as part of that, there are these themes that are emerging, speed and affordability. And so, how did that lead through a series of stepping stones to you going to the senior leadership team and saying, "Hey, I think we really need to give this this idea behind, you know, a subscription membership to Door Dash a real shot."

>> There there's a couple things, right? It's like you having having the conviction, right? and having the data or the customer anecdotes to back it up. Talking to customers, like I probably talked to more customers than anyone else at the company about affordability and subscription at that time. So I had a pretty good pulse on is this something that is actually viable? Is this something that customers would be willing to pay? Right? is the the skepticism was mostly around okay number one uh are customers and this is 2016 right now obviously everyone has a subscription now and and has copied the model but back in 2016 this was a real question right are people willing to pay a subscription fee for food delivery it sounds kind of crazy right think pre- dooror dash days you you you you call a pizza restaurant and you place an order you would never pay a subscription fee for for for free delivery Right? So,

that was one big uh point of skepticism. The other big one was is this actually going to get people to order more, right? Or is this just going to cannibalize or or or brick the business? Um, and I remember uh the the head of product and and also Christopher Payne or the the COO at the time, um they were both very very skeptical. Um but uh you know I think when you have a lot of conviction in something and you have the data and you have the customer um anecdotes to back it up like you have to go for it. And I think that's something you know especially in the early days Door Dash had this culture of meritocracy. It was uh whoever has the most compelling uh ideas and has the results they speak for themselves. And so you can kind of go and and build whatever right. It it also helped that I you know had built some credibil credibility and had um had some trust with with our head of product and and

and Christopher Payne and um but yeah you know it was it definitely I remember at the time thinking is this like a is this like a big career mistake? Like we've got C we call him CP who is uh used to work uh at Amazon reporting to Jeff Bezos and he's like very opinionated and he's right most of the time and he's telling me this is a dumb idea. I was like is this is this a should I should I should I be doing this? But at the end of the day right it's about having the conviction and having the data and the customer insights to back it up. And obviously after we we launched and and it was successful, you know, a few months later he was he completely flipped and was like, "Dash pass is the way that we uh win affordability. This is the this is our answer to affordability and is now obviously a a cornerstone of Door Dash."

>> Yeah. So let's unpack the story a bit. First I have to say I started my career at Bane in management consulting and at Bane we would call that a career limiting move. So good for you for taking the risk and and as you said it always helps to have had a track record going into that moment. so that you had some credibility to lean on. So it sounds like the executive team was initially skeptical for understandable reasons. Subscriptions were not common at that point. I imagine there's also just a piece of this which is it's a little bit odd to charge a subscription for a service that has variable costs associated with the volume of deliveries. And so reconciling those things and making sure the unit economics work was not a foregone conclusion. So, it sounds like credit to the executive team at Door Dash for building a culture where leaders like you were empowered to take these smart risks, but it was still a risk, which

means I'm guessing you weren't given a lot of resources. And so, what did the

initial MVP of Dash Pass look like? And how did you go about proving your hypothesis in a way that didn't distract from the core business? It actually before Dashpass, before we actually created the MVP for Dashpass, uh it created this concept of a of a delivery pack, right? So the the the hypothesis we were trying to test was if we offer a pack of deliveries, say, you know, 10 deliveries for $2 for 20 bucks, right? So $2 $2 a delivery, will that actually get people to order more? Right? And so it's kind of like a precursor to the subscription product. The reason why we did that is because it was much faster to build and we'd be able to kind of validate the concept. Um, so we built I think we shipped that in a week or two and saw good results from that. Uh, and and the other thing is we we there's this culture of testing in Door Dash, right? So we take one subm market. I think we we tested this in Dallas and

one other Midwest submarket. I can't remember, but uh there's this culture of testing. And so, you know, we just go and and and test it and get the results. And then that's like another data point that we can use to say okay the subscription thing might actually work. Um and so the first version of dash so that that paired with you know talking to customers and looking at the the data crunching the numbers um that gave me the confidence to say you know what I get that I might be fired in 2 months but I think this is the right bet and so we're going to we're going to we're going to build it. The MVP was there probably four or five engineers building it. I just took one of the pods uh uh on my team, just carved it out and just said, "We're going to build this for for a few weeks." Launched it in probably three or four weeks. Uh it was very hacky. Uh it was very scrappy. A lot of things were missing, but the core

functionality was there and it was enough to get the signal. Um the initial version was unlimited free delivery uh over $20. And so that was the very first iteration. Um, and it was just a very simple thing. We didn't know if it would work economically and and in fact it didn't work economically the very first version. Um, but it was enough signal to get us um some early results.

>> So, and one clarifying question I want to ask cuz I I hear this question from companies operating hyper local marketplaces or hyper local businesses all the time, which is like how do you select the right cities or DMAs to focus on? So, you mentioned you tested a couple markets. What was the process you used to select those markets? >> Yeah. Uh take the subm markets, sort by profitability. That's something it was it was very simple, right? Like we we we didn't overthink it. It was what are the markets where we can actually do this and not completely brick the bank. Like the the other thing that's important to mention is uh the the the tailwind that we had was at the time Door Dash was becoming more efficient and the unit economics had gotten to the point where uh it was actually uh positive unit economics. Um one very important constraint for us is we did not want to build a subscription business on top of

negative or or neutral unit economics. Well, definitely not negative in economics because we want the incentives to be aligned. We can't have a situation where people ordering more actually causes us to lose more money. And so that's very important because as soon as the unit economics uh flip, then that means that every incremental order generates more profitability. And so then the customer wants that, Door Dash wants that, and the merchants want that, Dashers want that. Everything's kind of aligned. And that was the missing piece.

And and so uh my my finance partner at the time had done a ton of modeling and we had kind of gotten to the point where okay this might actually work right 2 years ago it wouldn't have worked. I we were losing 10 or 12 an order in San Francisco would not have worked right. Um but the company had gotten a lot more efficient. Um and and so that's it was at the turning point where the unit economics might actually support it.

>> Yeah. Well, timing is everything and it sounds like you had good timing. Um, you mentioned this $20 minimum order. So, if I heard that correctly, Dashpass only applied if the order value was over $20. And I imagine that was also a very important part of ensuring that the unit economics behind Dashpass worked. >> Yes. And so there's that was a critical and and there wasn't any complicated thing here. We just kind of did a model and and said, you know, we're going to launch it, test it, get the data, and iterate. Right. I think the best thing you can do, especially early on when you're trying to find product market fit, is don't sit at the whiteboard. Don't live in Excel or or SQL or whatever. Just build the thing, test it, and get get real data. Um, so it's just our starting point, right? So there are a few levers that you can kind of play with to that that influence the economics of it and also then influence

the growth rate of it, the adoption of it, the retention and everything. Right? So subtotal minimum was one of them. Uh the savings amount was another. Uh how much we discounted the service fee. Uh and then uh what restaurants were included uh in Dash Pass, right? because uh right there were some restaurants where people were placing large orders, the commission rates were higher, those were very profitable orders and so it actually benefited a merchant to become part of Dashpass because then they would see their business grow. And that was another actually >> uh very important part of the Dashpass growth story that nobody really talks about, right? like how how did we figure out how to make the the pitch work for merchants to actually get on to Dashpass and then actually be good for them and help them grow their business.

>> Yeah, and we should come back to that later in the discussion because you're right, a lot of what has been discussed around Dashpass has been on the consumer side of the marketplace, but I imagine for merchants, one of their biggest pain points is making sure they have a steady, reliable volume of orders because their entire business depends on that, right? they have significant fixed costs that they have to offset with order volume. And so if Dashpass can provide more reliable order volume, that's a very good thing. Let's come back to that a little bit later. Um, for

now, let's get into so you launched Dashpass. You said the very first version wasn't profitable, but you iterate, you iterate, and it gets to the point where you're seeing members on Dashpass ordering twice as much on average as non-members. Was that just correlation? Like were you just skimming the highest intent users from the Door Dash customer pool who were taking advantage of the better economics with Dashpass or or did you actually isolate causation that was causing people to order more because the experience was so good?

>> Yeah, this was actually another thing that uh our head of product and and CO were worried about. Actually, I remember um to to answer your question, yes, we we it it was causation um because we had put it behind an AB test and so we could actually isolate that this growth was happening because of Dashp pass and not just kind of selection bias from people shifting over and the order frequency increasing. And I and I'll and I'll touch a little bit more on that first, but I do want to share one thing before that, which is um we're reviewing the results, the AB test results with uh with uh CP and he's looking at the data and he goes, "So, let me get this straight." And by the way, like the growth numbers were insane. Like it it was just up and to the right. But he he looks at me, he says, "Let me get this straight. So, you're taking our best customers and then you're making them unprofitable

and then getting them to order more unprofitable orders. At that point, I was like I was like maybe maybe this was maybe I shouldn't have built this. >> Maybe this was a career limiting move. >> Maybe this was a career limiting move. Yeah, exactly. But uh in the back of my head, I knew that there were a lot of levers that we could adjust to make the math work. And so I wasn't actually world worried, but it was probably the point in this journey where I was the most like, "Oh, I'm I'm definitely getting fired." Um, >> it's it's always darkest before the dawn.

>> Yeah. Yeah. But uh but jokes aside, so we were reviewing the AB test results and what we saw was um and and just just for context, right, this is around 2018. you know most tests we run most AB tests we we ran would be a little bit positive you know on the order of uh 0.1% improvement in conversion something like that uh and maybe the the goal for the pod for a year would be maybe a quarter of a percent or half a percent improvement which at scale is is quite meaningful right like this was 2018 we were doing about 4 billion run rate gov um and so you one or two% on that's that's a lot. So So the AB the initial AB test results for Dash Pass if I remember correctly were around they're they're almost 2% lift in order frequency in the first 2 or 3 weeks. And the other thing about this was the usually when you run an AB test you get like an instant lift in order volume or conversion and then most of the time it

just kind of stays flat. The interesting thing about Dash Pass was it didn't stay it continued to compound, >> right? And so that started off as like half a percent or or 1% the first week, compounded 1 and a/4, one and a half, 2%. So it was just clearly up into the right uh growth compounding and so clearly something was working. Um the economics did not work at that that first result, which is why we got that reaction from CP. But um but that's okay. you know, you you you you build the thing, you you you learn fast, you fail fast, and then you iterate. And so the next iteration of D pass was successful. Like we we saw the compounding growth and we were able to figure out how to uh make it make it

profitable. So let's talk about the levers that you pulled to get to the profitable version of Dash Fast that ultimately launched nationally in August 2018. like what to the extent you can share what were some of the levers that helped crack the code and turn CP into a true believer. >> Yeah. Yeah. So the I so there's a few levers um I mentioned earlier around subtotal minimum uh around how how much of the service fee we were discounting and then what selection was uh was part of Dash Pass. Um, and so the first levers that we tested were the subtotal minimum and then the service fee uh the service fee discount. So the first version we tested but the MVP version it was we completely we got rid of the service fee and so I think service fee around that time was about 15%. And so we 10 or 15, I can't remember, but we we just got rid of it. And so it was um that was a very expensive uh thing for

us, but we wanted to test a very simple value proposition. Um on when we launched, the customers would say, "This is great, but $20 is kind of hard to hit." And this was in 2018, right? So like $18, right? This is uh we've had a lot of inflation since then, but uh so so people didn't like the $20 subtotal uh M. they felt it was too high of a barrier. And so we tested a version where uh we lowered the subtotal men to 15 uh and we instead of discounting the full service fee of 15% we discounted about 10% of it. So still most of the service fee um and that was that was a version that that had worked. And the third thing we did, I can't remember if we did this before the initial launch or or later on was we created this concept of which restaurants are Dash Pass eligible. Um because the economics of restaurants are they vary widely depending on ticket sizes, commission rates, how accurate are their orders,

right? Cuz if they're inaccurate with their orders, they forget items or they're missing items and we have to pay a lot of support costs and uh so so on and so forth. So there were a lot of merchant specific uh economics and so those were the three main lovers that we that we had uh kind of tweaked.

>> So then you get to the other side of this you launched nationally and it sounds like once you cracked the code on getting the unit economics to work it just was sort of this compounding benefit and it and it ultimately won the executive team over and became a very core part of Door Dash's strategy around affordability. So, what what happened next? Like, how did Door Dash change its stance on resourcing Dash Pass? And and what were some of the innovations that came after the August 2018 launch that allowed Dashpass to become so core to Door Dash's trajectory? So, so I think Tony's investment philosophy is like you you kind of you give some bets some resources to grow and see if they can incubate, but as soon as you see something that's, you know, catching fire, like it's it's it's going well, it's starting to take off, then you invest aggressively in it. And so, I mean, the first version of Dashpass was

built by four or five engineers in three or four weeks. Um, we significantly grew the Dashpass team. uh and invested also invested dollars in Dashpass in terms of benefits and and the discounts and savings that we're that we're willing to offer. And so the the next phase and and also this was that was probably around the co the COVID time frame too. And so that was another accelerant. Um but uh we we essentially just resourced Dashpass more heavily. what started from like a four or five person edge team, you know, grew to over 100 engineers and it's I'm sure it's even even larger today. But um but yeah, it was just the growth of the team, growth of the investment, growth of the mind share.

And then the other kind of big companywide thing is during our our our planning sessions, like our annual planning sessions, every team across the company was asked to figure out how does like what can they build with Dashpass? like what is the Dashpass benefit that they should incubate or or create? Um, and so it was kind of like this companywide effort to use Dashpass as the cornerstone for affordability to to grow because we saw that once customers join Dashpass, we saw their order frequency skyrocket, their retention skyrocket, um, their LTV increase, right? So, all of these good things uh, good things for the business.

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So then reflecting back on this experience, what lessons did you learn about how to champion a big contrarian idea like this at a company as large as Door Dash? I mean, because even 2016 to 2018, like Door Dash was already a fairly large, rapidly growing company at that point with a lot of very experienced executives who had big opinions. What were some of the key lessons you learned? A couple that I've picked out already is one, have the courage of your conviction. to make sure that you are very close to the voice of the customer so you can back everything up by what the customer wants. And then a third one that I sort of inferred from what you talked about is keep the initial MVP simple even if it means sacrificing some economics because I love what you said about the initial version completely eliminated the delivery fee because if you nickel and dime the customer on that right out of the gate, you run the

risk of a false negative because it's just too complex and people are like I don't have time for this. So that's another very important lesson that I see time and time again is when you're testing a big bold idea, keep it very simple as a starting point. And then once you get signal, you can turn the dials and pull the levers to make it more profitable. Those are three lessons I picked up. But what other lessons did you learn on this journey about how to champion an idea like this?

>> Yeah, the the one thing I'd add to so conviction is critical. I think the inputs to that conviction, one is talking to the customer. The other one is data, right? I I don't want to underplay how much uh you know modeling and analysis we did to you know have some we we were fairly sure that this could work right we it wasn't like 100% confidence but we had some numbers that said okay this could actually work um or we had some assumptions that were believable um the third thing I'd say is you so so build the test like test move fast it's okay to fail the more important thing is take the learnings and then iterate, right? If it still has legs. Um, but but the other thing is just within a company, I think you need to have a certain level of credibility in order to do something like this. And so I would say, you know, if you're joining a a a new early stage company, you might need to build a little bit of

credibility for for the first, I don't know, 6 months or so. Uh, but once you have that, then bet on yourself. bet on the bet on the conviction that you have and um yeah, I think it's important to to to bet big. If you if you don't bet big, you can't win big. >> Yeah, I think that's really good advice. And and the irony is it's really hard to find professionals in tech or really in any industry who can check both of those boxes, right? People who build a lot of credibility within a tech startup often build credibility because they're reliable and because they consistently have good ideas. Every once in a while, you may have a great idea, but that great idea could totally flop. And so, it's high risk. And so, you need the combination of somebody who has a high batting average, but is also willing to totally swing for the fences. And it's hard to find those people. I think Door Dash has done an unusually good job of

attracting people like that. And it goes back to the culture that you said Tony and CP and other members of the executive team built around empowering people to take smart risks. But they better they better have the data to back it up or or it's not going to work out.

Um let's fast forward to today and where you think Dash Pass goes from here. So you recently left Door Dash, but in your most recent chapter you were leading new verticals and that included expanding Door Dash beyond restaurants into grocery, convenience, alcohol and retail. How did Dashp pass help to power that expansion? >> Yeah, so Dashpass, what what it really did was it helped make our customers stickier, right? It helped build the habit of Door Dash with those customers.

And at first the habit was with restaurants, of course, but then if you're using, you're familiar with Door Dash, you're using it often. Um, and then you see that, hey, actually Door Dash can also save you time on groceries and and retail goods and it's also free delivery, right? So it lowers the barrier to try uh those new verticals and so it lowers the risk lowers the barrier because the delivery is free and so we see a higher rate of Dash Pass users um trying new verticals for the first time. Uh and I think that the latest public stat is that um 75% of all new vertical orders so all grocery and retail orders um are from Dashpass users. And so you can see that there's a really sticky set of customers that then use Door Dash not just for restaurant delivery, but also grocery delivery, retail delivery, and and other things that we build out in the future.

>> And so then to double click on that point, what makes Dash Pass more powerful both for Door Dash's business, but also for customers when they're using it across multiple verticals? >> So I think there's a couple things, right? There's there's number one, just it's just more top of- mind, right? If I if I have one app that works that I'm used to, why do I need another app? And so I think there the more and this is kind of like the super app strategy, right? The more uh utility, the more uh jobs you can solve with one app. I think just long run people are going to just stick to one app instead of having to have an app for uh restaurant delivery, an app for grocery delivery, an app for, you know, whatever. So I think having having uh a sticky set of customers on the app and having the app increase the jobs that it can do is the way that we we can expand and kind of uh grow other businesses at Door Dash. Makes sense.

Okay. So this this relates then to my next point and this this seems straight out of the Amazon playbook. So, I don't know if this relates to lessons CP learned when he was at Amazon, but Dash Pass's price has stayed flat at $9.99 per month for the last many years since 2018 when you really launched it nationally, even as the benefits have continued to grow. So, what's driven that decision to keep price flat and and how does the company decide which benefits belong behind Dash Pass given that you've been very conservative about increasing prices?

>> Yeah, so I think there's a lot of different point of views on this one. I I'll share mine. Um, so so my take is pricing is one of the last things that it's one of the last levers that you want to pull for subscription because it's not increase increasing prices. I mean it's not making the product better, it's making the product worse. And so if we have a set of resources, let's say we have a team of whatever 100 engineers, how are you going to allocate those resources? The moment you start allocating those resources towards figuring out how to optimize increasing the subscription fee is the moment where I think you're losing you you you've lost sight of the core thing which is how do you make the product better and so I would push off increasing this fee as long as possible because the other thing is the longer you keep the fee $9.99 the longer it has time to compound.

>> [clears throat] >> and the grow like that. Giving it time to compound growth is super super important, right? >> I can tell you if we increase the the subscription fee by a dollar or two like it would be it would look really good on paper like that. I'm very confident in that your revenue would increase 10 20% overnight. You get a little bit of churn but it's not going to look that big in in in the initial data. But I can also tell you that if you take that data and you extend it out not just a few months but 5 10 years it is going to massively slow down the growth of the business.

And so I think people underestimate compounding math. And so my my philosophy is just keep two things. keep the focus on actually building uh making the product better and the Dashpass offering better and then to let that growth rate compound for as long as possible at as high of a rate as possible. Yeah, I mean that's something you hear from luminaries in tech all the time, which is don't underestimate the power of compounding math. And it does sound very similar to the Amazon Prime playbook, which is like this is so core to customer retention, to customer satisfaction, to cross-selling customers across multiple verticals. I also imagine this is something we haven't talked about as much, but I imagine it drives additional word of mouth, which lowers blended acquisition costs because now you're acquiring more customers organically. And so it has all of these compounding benefits. Related to that,

so CEO Tony Shu has called Dashpass the core driver of the company's relationship with consumers at this point. Why does it play such a critical role for customer retention? I mean, we talked about some of this, but why why is it so powerful retention? And then let's also talk a little bit about virality. Have you actually seen Dashpass drive increased organic word of mouth? >> Why is it powerful for retention? Well, I think there's two there's there's two ways that I think about growth and and retention. Number one is the core product offering. So it goes back to talk like this is one of the three key things that customers uh complain about, right? Not complain about, but things that they wish were better. Like you can always be cheaper, you can always have more selection, you can always improve the quality, right? And so by taking a real stab at the affordability problem and meaningfully, right, we're not

talking like 10 20%. like if if you order Dashpass, you're saving probably 80% on on the fees. And so uh by taking a meaningful uh uh improvement on one of the three key customer problems, that's going to drive retention, right? The the other things. So I said that that like the core product is the first uh place to look to drive growth, but the second place is just on kind of like growth product features. And this would be things like the signup flow, billing, like all all these kind of small things that are all 1enters or 2enters, but if you add them up, that's a lot, right?

And so we've invested a lot in that uh kind of these growth uh growth products for Dashpass, and that's also helped um drive retention. And so that combination of those two things has helped um turn Dash Pass into a highly retentive product um that is causal, not just a correlation. >> And and related to that last point you made, I obviously I've spent much of my career in growth products. So I'm curious to the extent you can share again Door Dash is a public company so don't share anything you're not comfortable with but are there any

particular growth product AB tests that you ran on Door Dash once it was clear that the core idea was working that that drove significant lifts and things like conversion into Dash Pass membership or retention of of Dash Pass members. Not not to get into too too many specifics, but I think the there were a lot of changes we made to the sign up flow to having customers discover Dash Pass to to how we do billing and and um like those are those are a few of the big uh categories. But my advice would be if if someone's trying to uh drive growth or retention or improve their product and and take like a growth product lens, my advice would be to go through the flow.

uh go through the user flows and figure out where where you should introduce this, how you talk about it, and then talk to customers and figure out does this make sense? Does this actually this is actually going to get people to sign up? Right? And so the question you can ask is um what percentage of people are even discovering that you have this membership or subscription program. And then in the key flow, right, like the whole checkout flow, right? You can ask customers, did you did you know that we we have we have a subscription program that can save money? And then what percentage of them actually see some, you know, upsell or sign up flow for Dashpass? And so it's just going through the user flows and talking to customers to figure out what is the right place to talk about it and what is the uh what is the right way to talk about it. And we would get pretty targeted too. If someone was what I an example is if

someone's placing a large order and if they sign up for Dash Pass, we'll more than pay for the the $10 a month on that single order. We're going to be more loud about it than if someone's placing a small order where it's not really going to benefit them in that first order. >> Yeah. I mean, the thing I love most about your response to that question is you started again with the customer at the center of it. I feel like so many marketers and growth product professionals, I've been guilty of this at points in my career. It's like you start from the vantage point of value capture. How do we increase our payw wall view rate? How do we get aggressive with tactics on the payw wall itself to drive more people into annual subscription plans versus monthly subscription plans because we know that will have higher LTV and higher subscriber attention. And it's not wrong to think about it through that lens as a

business, but it's sort of backwards because where you really want to start is what does the customer want and how can we do a better job of fulfilling that need and then how do we design growth product experiments, monetization experiments in a way that's a win-win. And so I love how you sort of flipped it and said, well, it turns out a lot of our customers don't even know Dashpass exists. what would be a natural point to ask them at checkout when by telling them Dashpass exists, we inform them they could have saved money on this very order if they were a member. That's a win-win, right? It's not a it's not a zero- sum game where you're extracting value from the customer. It's a win for both sides because you're informing them of ways they could save money. They can always opt out, but there's going to be a high percentage of customers who decide to opt in if it makes sense for them economically. So, this brings me to

my last question before we get to our lightning round. Um, Door Dash CEO, uh, Tony Shu mentioned that Dashpad Dashpass exited 2025 with more than 35 million members, which is roughly half of Door Dash's current MAUs. Um, but he still believes that it's at singledigit percentage points of its full potential. And so, what do you think are some of the biggest levers to continue growing Dash Pass going forward? >> That's that's classic Tony. Uh, he Yeah, he he sets the bar very high. Um, yeah.

So, I I I think that Dashpass has a there's a lot more that we can do at Dashpass, right? The ambition is to make Dashpass the best membership program in the world. Something that you cannot live without. If I if I think about, you know, if if I were still uh uh you know, running product for Dashpass, I would think about how how else can we uh add more value to customers, right? And so, how can we how can we continue to uh take our core, which is restaurants and grocery and and and retail, how do we add benefits there, right? More savings, helping customers get access to hard to find reservations like Michelin star reservations. Um, and just taking every part of the business and every new business that we build and adding more benefits to it. Like that's how that's how you you asked about growing retention and stickiness earlier. That's how you do it, right? you you continue to add more benefits and uh and savings

to the program to make it more and more valuable driving up the retention rate driving up the LTV um etc. Right? So I would start with the core continue building uh Dash benefits on top of the new businesses that we're launching and then if I think really long term next you know 5 years next decade um why couldn't Dash Pass or Door Dash be your personal assistant for the physical world >> right you you you think about I mean there's there's a lot of development on AI personal assistance these days right you have you have everybody using chat GBT but also the Muse coming out, uh, Instinct. These are all like the next level of, uh, of AI assistance, right?

ChachiBT is more like a replace Google replacement. It's like a retrieve knowledge, return knowledge, summarize it kind of thing. But with the next uh, cohort of AI assistants, it's more about, okay, Muse or Instinct will actually help you book a dinner reservation or maybe they'll help you order Door Dash. um they're actually helping you do things that are not just information retrieval and summary. What's missing from that though is I think the the the layer where you actually need to get things done in the physical world, right? If I need to go pick up my dry cleaning or I need to go maybe drop off my car to get a an oil change. Actually, I I have a Tesla. I don't have I don't need an oil change.

But the you know if you need to go do something in the physical world I think Door Dash is very welluh positioned and Dashpass is very well positioned to be that membership that gives you a personal assistant to the physical world because the Dasher we have you know there's a lot of Dashers on the platform who also want to look for more earning opportunities. And so if you think about what are the jobs that a Dasher could do that has more earning potential than delivering restaurants or delivering groceries, maybe there are things that we can do to offer those physical world tasks um and solve a problem for customers around anything they need to get done in in the physical world.

>> Yeah. Yeah. Well, it's certainly an exciting vision and I've been hearing all sorts of things about Muse and Instinct recently as as I know everyone in tech has, but I hadn't yet viewed it through the lens of what a company like Door Dash, which has already built a core competency and a very powerful competitive mode around managing physical delivery and infrastructure in the real world, is very well positioned to take advantage of those tailwinds. So, let's transition

to our lightning round. And I always start with the same question which is what was the best part about working at Door Dash in your experience and what's one thing you would have changed? >> There are a lot of things that I thought were very good about the culture, right? There's the culture of meritocracy, the culture of uh taking bets, taking swings, starting small but dreaming big, moving fast, like all these things. Um I think there's a culture of ambition. I give Tony a lot of credit for this. He would say, I remember we I think we hit 10 million Dashpass members like faster than we thought we would. And he said, okay, great. That means the goal wasn't ambitious enough. Now go hit 20 million and then 100 [laughter] million. And so that's very classic Tony. But I I think one thing I learned from Tony is that uh you know he really believes that people rise the expectations that you set for

them. And so, you know, having that culture of setting really ambitious goals and then empowering the teams to hit them is, I think, a a key part of um how how Door Dash was able to grow, right? The other question, this is somewhat related, but a lot of people ask me like how did how did Door Dash win, right? There's you you had Uber, which was uh more wellunded. You had GrubHub, which was earlier. It had 80 or 90% market share in New York. And there wasn't really a silver bullet. I really do think it was the people and the culture and like the the execution. Um there wasn't any secret like everybody knows you want to become cheaper, you want to become you want to get selection, you want to have higher quality, but it's like having the actual execution to be able to do those things um and do them fast I think is is is how a big part of how um Door Dash was able to get to where it is. Um, one thing I

change is I think, uh, continuing, you know, as the company gets bigger, I think it is harder to have people still take those big swings. And so, I think it's something that, you know, this is going to be with any company that is is public and and continuing to grow, but, uh, really getting back to placing some more of these conviction bets. Um, I think that Door Dash is very very good at looking at data and we we have a great analytics team and and so we are very very data uh data driven and in the way that we make decisions. Sometimes bets need time to bake and the initial data or the short-term data I should say is not a reflection of the true potential and the long-term results. Um, you know, you see this a lot with a bunch of pricing tests where um, you have again that that compounding that happens over the course of multiple years that we don't have patience for, right? We're not going to

run an AV test for 10 years. Um, so I I think coming coming back to a little bit of that conviction bet point of view and balancing that with our already strong data driven culture. Yeah, I I like that answer a lot. And uh I I actually know Tony personally from business school and I have stories about things as silly as pingpong matches that would tell you just what a competitive guy he is. So it doesn't surprise me and I love your point about you know people rise to the expectations you set for them. That does sound like classic Tony and it's been a huge part of Door Dash's success story.

So it's great to hear that from you. Second question is before Door Dash, so you had your own startup called Gym Flow. How did being a founder impact how you approached your role at Door Dash? >> Yeah, I think the the biggest thing is more culture. It's like you you have to be an owner. Like when you're when you're a startup founder and and you're a small team, you wear every single hat, right? Like if you if something needs to be done, you need to go and and other people are working on other things, you need to go do it, right? So it's that ownership mentality and just figuring out a way to break through walls and get things done and make things happen. And so, um, there's, yeah, there's a lot of like hustling that you need to do as a as a startup founder at a super early stage. And so, bringing that same mindset to Door Dash when I first joined, I think that was super important, right? We didn't have, I

mean, obviously today, Door Dash has really great analytics teams, really great um, uh, you know, finance teams that can kind of crunch numbers. back then like I was writing SQL queries and there was no chat GPT to to to you know do it for me. Um I had never written a SQL query before. I I had to learn on the job. And so it's really just about becoming an owner, figuring out how to break through walls, get it done, and just figure out a way. Yeah, I love that. And it's sort of an obvious answer, but it's an answer you hear over and over again from some of the top tech companies on why they love hiring founders. Uh because as a founder, you own the business and so there are no excuses. There's no passing the buck.

Ultimately, the buck stops with you and you just have to find a way to figure it out. Um what's the meal that you and your family have ordered most frequently on Door Dash? >> Interesting. That's a that's a tough one. Well, probably my personal most ordered thing on Door Dash is the uh RT rotisserie salad. I probably ordered that over a hundred times. Uh just that's my usual order when I when I'm in the office. Um, but at home with the family, you know, we get a sushi a lot.

We get oaks deli, um, acai bowls from Palmetto Superfoods. You know, there's there's a long long rotation of of favorites. You have good tastes. I have to say I I eat a salad almost every day at Sweet Green and I love sushi and I love acai bowls. So, sounds like we have similar tastes. We talked about this a bit earlier, but contrarian bets like Dash Pass can be very risky, especially for junior employees. So, above and beyond some of the things you've already said, what what's one piece of advice you would give to a junior employee at a tech startup who's staking their career on on making one of these big bets?

>> I would I would ask yourself, do you how much conviction do you have in the bet? And do you have the the right things to back that up? And if you do, if you have a lot of conviction, you should go for it. Because, as I said earlier, if you don't swing big, you don't win big. And so, especially if you're earlier in your career, you got to take these risks, right? You don't want to be Yeah. You don't want to just hit the singles and and and doubles. You got to hit the home runs. Um, and then the other thing is uh the other thing is I would say you you you got to learn fast and and iterate fast. Um, well, one one final thing maybe to think about is if you're considering a big swing, but you're kind of like gunshy, just ask yourself, will I regret not taking this swing in the future? Right? I think there's this life philosophy of regret minimization as a way to make decisions, right? What is

the decision that I will regret the most? And if you're going to if you think you're going to regret not taking that big swing or even joining a startup or joining a company, um, then you should probably go for it. >> Yeah, I think that's great advice, especially in the AI era because I feel like companies have less loyalty to their employees than they ever have anyways. And AI has unlocked all sorts of new opportunities. And so there are compounding returns to taking big bets that pay off. And if you swing and you miss, you can always take another bet later. Um, last question is, as a product builder, what most excites you about building with AI right now?

>> Yeah, there's I I I think Well, do you mean building with AI or the types of AI products that are that are out there today? >> Could be either one. Building with AI tools and or particular categories of AI products that you're really interested in. >> Yeah. On the building with AI tools, I think this is a super exciting time to be a builder, right? you I I've kind of become obsessed with this idea of you know like a a one person unicorn or like a 10 person company that's a you know uh a 10 billion or 100 billion in in um in in revenue and and so I think that is going to happen in the next few years and so it it's and and I think it's a lot it's a lot of fun to build with AI right now you can do so much more than you could before and you can do It's so much faster. And so I think you're going to see this new cohort of like micro startups where uh it's a few people.

Maybe it's like 10 people, five 10 people, but they're solving more niche problems because it's the juice is worth the squeeze, right? Before it would take long time to build things. You have to go you have to go after bigger uh bigger time opportunities. I think when the cost of building is so low now, you're going to see a lot more of these uh micro micro companies. Um I think in terms of AI products, I think the next wave of AI personal assistants are uh I I think they're fascinating. I think that's that's probably the most exciting thing in my mind right now. So, I'm talking about, you know, the the muses, the grob bots, the instincts where it's no longer about a Google replacement or information retrieval and summary. It's now about how do I offlist all of my entire to-do list, my entire uh all my errands to a personal AI assistant. And there's, don't get me wrong, there's a long way to go, right? Most most of the

time this stuff doesn't work. Um, but I think it's a super exciting um, space and I think that it's going to make it's going to increase productivity and ultimately change the way that people live their lives. And so it's it's super exciting for me to see. >> Yeah, I agree. It is exciting and it's it's really the first tech wave where I've been so close to it that you can almost see week by week, month by month the changes that are happening. And I mean, one example of that is six months ago, you had people, hobbyists and and bleeding edge people in the AI world who were putting Open Claw and other fully autonomous agents onto Mac minis. But now you have companies that are actually commercializing that for the masses for people who aren't technical at all and don't have the skills or the time to figure it out. And I think that's a really exciting inflection point to be at. Well, this was an awesome

discussion. I knew it would be. Thanks for coming on, Jimmy. I really appreciate it. any parting words you want to leave the audience with before we wrap up? >> Uh, no, I I had a lot of fun. Thanks for having me on the show. Um, I think uh, you know, if if you found this conversation interesting or helpful, feel free to follow me on on X. Uh, and then also if you're a founder that's looking for help with product strategy or growth strategy, um, I also do part-time advising. So, uh, you can go to my website and, uh, send me a message.

>> I love that. And based on how you broke down some of the problems you faced at Door Dash on the on the episode today, I I have no doubt you will be a great product adviser. Thanks again, Jimmy. >> Thanks, Phil. >> Thanks again to Revenue Cat for sponsoring this episode. If you're building a subscription app, you can use RevenueCat to deploy native pays, run continuous AB tests, automate win back campaigns, and unlock more revenue. I work with dozens of subscription apps, and most of them are already using RevenueCat as their single source of truth to power their businesses. Learn more at revenuecat.com/subversive.