AMA with employee one at DoorDash

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Today Andrew Munday is the founder of Local Kitchens, a micro food hall that lets you mix-and-match your favorite local restaurants in one easy order.

He emailed me recently about how he was the first employee at DoorDash and all the things he could talk about from that experience. I’m so excited to have him on to talk about it and also his new company.

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Andrew Munday

Andrew Munday

Local Kitchens

Andrew Munday is the founder of Local Kitchens, a micro food hall that lets you mix-and-match your favorite local restaurants in one easy order.

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Full Interview Transcript

Andrew W: Hey there, freedom fighters. I’m so excited to do this interview. I’m so excited to do this interview that literally before going to bed last night, I messaged today’s guests. And I said, I had a last minute change with one of my other guests. Can you jump in and do this interview? And he said, sure. And the reason I’m excited about it is because of the way that today’s guest Andrew Munday.

Got my attention. East, he started the email with an F bomb, and then he said, sorry for the bad word. And then he just gave me a list of things that he wanted to talk about. He’s a mixer defense. So he knew that I dig this. He goes, I was employee number one at door dash, ask me anything really I’ll I’ll tell you.

And so I did, I, I emailed him back and I said, Like is your equity worth of door dash. And you told me, and I’ll see if he wants to tell us here in the interview. Now that’s recording. He talked about, uh, whether you could get rich from a bootstrap, VC backed a employee company as an employee. In one of those companies, he started telling me about.

Well, a lot of different things. And basically what I want to know was can we come here and tell the story of what happened at door dash and what he’s trying to do with local kitchens? And I’m happy that he’s here to talk about it and we can do it. Thanks to two phenomenal sponsors. The first, if you’re paying your employees, you should use the company that Andrew told me he doesn’t use.

He used a competitor. Um, I’m going to be switching over to Gusto and we’ll talk about why I’m going to pay my people with Gusto and why I think you should too. And the second is HostGator. If you want a website hosted, do what I do go to hostgator.com/mixergy. First of all, Andrew.

Andrew M: Great to be here.

Andrew W: Do you feel comfortable saying what your equity in door dash is?

Andrew M: Th this is?

such a fun question. So I think, um, these are the best questions in life and people sometimes don’t want to answer it due to like safety. I don’t like fully get that. Um, so I, I think arrange, you know, I would say tens of millions, um, and I think people can do the math look. First employee, when I joined my equity was at 0.7, five.

Um, the company was valued at $12 million. Now it’s valued at like 60 billion. So it’s funny when people are like, what did he make? It’s like,

Andrew W: Hmm.

Andrew M: you could do some math and like get pretty close.

Andrew W: Well, you diluted as they took on more equity. You did, you

Andrew M: Yeah. Every round, like think of the founders who each started with 25% and now probably own 2%.

Um, I’m sure that’s all public.

Andrew W: Okay. And the number that you told me in private, I don’t think I could deduce it based on what you’ve said here, but was that an accurate number?

Andrew M: Yeah.

Andrew W: Okay. So tens of millions, I’m not going to betray your private, your, your trust, but I got a sense that it’s pretty substantial. I want to know why you were door dash.

What was there, but first let me understand what local kitchens is. This new company.

Andrew M: Yeah. So we started this company.

for a couple of reasons. One was to help merchants and restaurant brands expand. We met all these restaurants that have been around for 10 years, had great businesses and they weren’t doing the ghost kitchen thing. And we were really curious about that. You know, isn’t that supposed to make It

easier for you to.

The ghost kitchen thing is, you know, they give you a space to operate and that’s pretty much it. And so their big headache was actually operating the kitchen, doing all the work, hiring the GM’s and the employees and training and all that stuff. So we figured, Hey, well, you know what, if we did that, we signed our first brand proposition chicken.

Um, and then from there we, you know, have been going since then been around. I think a year and a half, um, our big difference is really the storefront experience. So you can like walk in, you can eat in there, delivery, pick up all that stuff.

Andrew W: so Curry up now is one of the restaurants on. I fricking love Curry up. Now it is Indian burritos. It’s one of the things that made San Francisco great for me. And I loved every once in a while after living there for, um, maybe a few years, five years or so, every once in a while, I start to see apple reference Curry up now at their presentation and other places I realized, oh yeah, this is like, if they love it enough to talk about it, I’m happy that this company should grow.

I want to see them all over. If they were to go with a standard ghost chick kitchen, a ghost kitchen would say, we have facilities here. Here’s everything you need to make your, your Indian burritos. And when somebody orders it from grub hub or Uber eats, you just bring it up to the part of the space where they’ll pick it up and they’ll pick it up and deliver it.

But it’s up to you to have your own chef, your own people, your own food, everything delivered there. You’re just renting space, kind of like a, we work.

Andrew M: Yeah, they’re, they’re a landlord, you

Andrew W: Okay. And local kitchen does

Andrew M: licensing. We essentially licensed Curry up and so, um, it’s faster for them.

Andrew W: like a franchisee, essentially, where you’ve got a set. Yes.

Andrew M: Yes. It’s similar.

Andrew W: Okay. Got it. And then in addition, you want people to be able to walk into the restaurant and say, I’m here for Curry up now, but while I’m here, you know what the melt, another San Francisco, uh, a new institution looks good. I’m going to buy one of those for my wife or a grilled cheese for

Andrew M: the you know, we see, we see probably over 65% of orders are mix and match. kids.

want grilled cheese, you know, someone wants a salad, someone wants a burger. Um, it’s you can’t really execute that unless they’re all kind of in the same roof.

Andrew W: Okay. All right. That’s a creative idea. Before we get into that, let’s go back into how you ended up at door dash. What we’re doing.

Andrew M: Yeah. So I if you back all the way up after college, it didn’t go to a grade. School was at a pretty crappy public company for three years. It was literally like the movie office space. Multiple bosses. Um, and I looked into the future and just thought, this there’s no way. This is like the next 30 years. So being in San Francisco, you know, I go into startups.

Um, the first two were pretty shitty. Um, I was not burned out, but I was like, man, this wasn’t what I thought it would be. I had this offer from LinkedIn for like 110 K. And at that time I thought six figures was just filthy rich, you know? Um, but I really like, I pictured walking around. These offices, you know, in like with people wearing nicer clothes.

And I just, I couldn’t do it, you know, so

Andrew W: I mean, you couldn’t be around people who are wearing khakis, for example, at a LinkedIn office. That’s what it was.

Andrew M: depleted pants. It’s just, I can’t, I can’t do it. Um, so you know, a good friend was at Stanford GSB, um, with, with Tony founder and CEO of, of door dash and he made an intro and they were just applying to YC. And there were pretty all in there living in this house. Tony’s living there with his wife, they’re living and working in this house.

And the energy is just like totally insane. And, um, I feel like from the first day I felt like I got to be a part of it. And then it was this kind of four month journey of basically like begging them to let me join this company that wasn’t even really a company. Um, So there were,

Andrew W: of the.

Andrew M: They were so committed and so smart and just grinding so hard.

Andrew W: How could you tell, give me an example of what you saw back then, and by the way, the more you move, I think your Mike on your headset is moving against your collar. So let’s watch that, but commute example, what you saw back then for.

Andrew M: You know, the one thing I re I remember once, uh, You know, we would interview after work at like nine, nine or 10:00 PM or whatever. So I’d go to the house. Um, and I remember Tony’s wife coming down it’s downstairs and just being like Tony, like th like the night’s over, like it’s time to go to bed. Um, and I just thought, man, like, this is wild.

Like these guys are So all in on this, you know, and it wasn’t about money or ego or any of that stuff. It’s just like, can we do.

Andrew W: So they weren’t even called, I think door dash at the time that you were talking to them. Right.

Andrew M: It was Palo Alto delivery, you know, it was PDF menus. Um, and at that time, you know, everyone was.

like, you shouldn’t deliver food cause like it’s too hard and it’s perishable and there’s like 30 companies trying to do this and all that stuff. And for me, You know, I had a super rough time in school and tons of teachers that, um, you know, didn’t believe in me and all that kind of stuff.

And so. I always live to prove people wrong. You know, the more someone says don’t do it. Um, the more I get become addicted and it’s just, I’m going to do it. That’s just the bottom line.

Andrew W: You went to Regis university what’s Regis university.

Andrew M: It’s a small Jesuit school in Denver.

Andrew W: Um, Would you like super Catholic because I think you even went to a Catholic high school. Right?

Andrew M: A Jesuit high school. Yeah. They’re both Jesuit. Um, no, I mean, I grew up Catholic, um, My mom’s quite Catholic, but, um, I don’t, I don’t have too strong beliefs either

Andrew W: Okay. So it wasn’t, it wasn’t for the academics. It wasn’t because you were where you especially passionate about Spanish. Is that why you went there to study Spanish?

Andrew M: No, no. I played soccer. So, you know, my options were basically walk on at a D one school and like never touched the. Or, you know, go D too, and like probably get some playing time by, you know, junior year or something like that. And, you know, thank God I had enough humility to go D too. Cause when you’re 17, you still think you’re like pretty good.

Um, but it was a good experience from that standpoint.

Andrew W: All right. So even before they were called DoorDash your title, there was operations before it became director of operations, you were just manager of operations. You would basically the operations guy. What does that even mean in a company that’s.

Andrew M: Yeah. I mean, w one thing I think I have some pride around is my title was director of operations. Um, the entire time I was there and I think titles are incredibly insignificant and, you know, Tony and I had zero conversations about my title. And as you can imagine, my responsibilities changed dramatically.

When I started, I was onboarding drivers. So I was calling probably 50 to 80 drivers. Interviewing them bringing them to the house, doing two to three orientations a day, seven days a week. Um, and you know, that was the burning problem was we have tons of demand and we don’t have enough drivers and then incentivizing them, calling them.

I probably had every single drivers number in my phone, you know, um, teaching them how to deliver doing it side by side. Like, you know, the first process we’re doing, we’re doing like two hour interviews with each driver, like in person.

Andrew W: why do you need two hours just to interview?

Andrew M: Uh, you don’t,

Andrew W: don’t, it was just that you didn’t know what to do, or maybe you were hanging out with them a little too much

Andrew M: No, we just, we,

Andrew W: linger.

Andrew M: we just, no, no. I mean, there was some purpose. We wanted it to go really well. And we’re asking, you know, what do you do in this situation? What do you do if you’re late? What do you do if you can’t find parking? Um, you know, what, if the customer doesn’t answer the door, like all this stuff, because there’s no product right now, the product tells you what to do and all these scenarios.

When you have extreme discretion, you need to figure out, you know, well, what’s, what’s the decision-making like for these people.

Andrew W: So right now, Andrew, I’m getting the likability part of you, like in this conversation, it comes through. So well, what I want to see is the operations methodology that you have when, when all these people are coming in and you don’t know what to ask and what the structure is, how does Andrew Andrew Monday, am I pronouncing your name right?

Monday?

Andrew M: Yup.

Andrew W: it with you. How does Andrew Monday organize a process to help make each one of these new onboarding experiences better and to systemize something that could go nationwide and.

Andrew M: Yeah, you’re, you’re just looking at, at each piece on its own. So initially there’s no checklist, right? And you have to get their driver’s license and insurance and all this stuff. Then you create a paper checklist, but now you have all this paper and then you make it digital, you know? And then I remember a night where. I would manually pay, pay drivers through bill pay through Silicon valley bank, bill pay. And I didn’t set this spreadsheet up, but someone set up, um, kind of a find if spreadsheet by first name. So once there were two Andrews, you know, they were getting paid twice. Um, so I talked to this engineer, I’m like, Hey, you know, I pay them weekly every Sunday night.

I’m up until two, 3:00 AM. Um, and obviously we make errors because of. You know, do you think you can automate this? So it’s a combination of operational processes and then also working with engineering. One thing that was huge at door dash, and we didn’t have product managers for the first like year or so.

Andrew W: what else did you do to help systemize the company to, to build the operations?

Andrew M: You know, hiring was a huge deal, right? Hiring, I think is kind of slept on. And so we had a very, um, structured hiring process. I hadn’t really hired that much before then. but I really gravitated towards it. So, you know, setting up an ATS, um, setting up really structured interviews, like demanding feedback.

So if you interview and you don’t send your feedback on that candidate within 24 hours, you know, I’m kicking you off the. Um, we were very, very good and structured at that process. And, um, I do think that was one of the biggest differences between us and competitors is our people were, you know, quite elite,

Andrew W: You basically creating like a workable software, I guess that’s one of these like combined board, like experiences where multiple people in the company could come together and talk about each hire. You built that.

Andrew M: Well, so we used, um, we used greenhouse, so there’s, you know, greenhouse and lever two most well-known ATS is, um, and then really formatting it to your needs. So we have this criteria of like eight categories, which is, you know, data-driven relentless, all the things that we care about a lot, um, and measuring people on those dimensions.

Andrew W: As the company changed in the first years that you were there for what? Four years, right? As the company changed in those four years, how did your role change?

Andrew M: Yeah, pretty dramatically. You know, at one point I was running legal, um, which I did for two years, you know, and then we’re getting, um, we’re getting some nasty letters from people and it’s like, um, I don’t really think we want me in court. Right. I think we want like a general counsel and then you figure out, you know, well, what’s a general counsel, what do they do?

How much do you pay them? All that kind of stuff. I really knew that it was like my moment and my opportunity. And I was just like grabbing, you know, becoming an expert quickly. You know, I was emailing general counsel at Lyft and getting tips from that person on how I can fight this stuff. I remember I went to, uh, a meeting at Uber with, cause you know, all of these independent contractor companies are working on the legislation stuff together.

And I go to this meeting and it’s like the GC of like caviar, Uber. You know, Lyft, TaskRabbit, all this stuff. And I’m like the only non GC there, you know, and I’m like kind of joking. I’m like, oh, you guys all have like law degrees. Like you don’t need a law degree to do this. Um, but it w I mean, those meetings were obvious that I’m like, it’s inappropriate for me to be doing this.

You know, I’m not, I, I just don’t know enough about what’s going on here. Um, so.

Andrew W: hustle was, you are enough of a hustler to say, I’m going to go and figure out who knows This, how do I get in the room with them? How do I get them to take my calls and email me back when I have a question, even if it’s not in their interest to help me figure this out right now, it’s in their interest to build a relationship with me,

Andrew M: Totally. And I think what helped a lot was the profile of the company, Y Combinator, you know, Sequoia led the series a like there’s no doubt that people respond to me, probably because of this profile.

Andrew W: Why did You care about it? Why did you care enough to want to get people food faster to their homes and beat other people? We’re going to do it anyway.

Andrew M: You know what I think I’ve learned in, in businesses, you can pick your passion. Um, but it’s so hard to find product market fit. That like, if you’re what I’m really into is competing, you know? And so like when, when local food group came together, you know, I was basically like, look, I’ll do any business. As long as we’re not selling cigarettes.

I’ll do whatever, because oftentimes people don’t do businesses because they think, well, I don’t love food delivery or whatever. And it’s like, when you get in it, you’ll love it. Right. When I got in it, I had a great affinity for the dashers. Right. You meet these people, hardworking, multiple jobs. You want to grind to create opportunity for them.

You meet restaurant owners, you meet customers. Um, and so I think it’s like, you gotta go where the opportunity is. And then once for me, once I’m in it, It’s to the death, you know, I don’t know the competitors, but I want them to wish that they never got in this space, you know, and, and for the time being like, I hate them, I hate their families.

I hate their teams. Like, I, I just, I don’t want them to be any anywhere near, you know, our prize.

Andrew W: Okay. I get that, that I think we talk a lot about how much we love the product, how much we love the vision, but I get also the businesses, a sport. And as long as it’s not selling something you don’t believe in or making something that you don’t like at all, there’s an excitement about being on a team with other people who are doing it about growing the numbers themselves.

And I know for many people. They say there’s gotta be more to life than seeing numbers grow on a spreadsheet, but it’s fun. it’s like saying to soccer players there’s gotta be more to life than getting that.

ball in the goal and seeing another number up on the scoreboard.

Andrew M: What is I’m open to hear, but I can tell you, we launched Palo Alto yesterday and the feeling of the entire team coming together, working over Thanksgiving, sacrificing being a contributing member on a team that’s like achieving, um, that hats that’s unbeatable. You know, like I told you, I have plenty of money.

I don’t need to do this, but I have this addiction to this feeling, which is, I mean, you’ve done it, right? The feeling of when you finish a marathon, like that’s a unique feeling and like, Um, and all of these wins in business.

Andrew W: What about the opposite of it? I’ll give you an exam.

Andrew M: you the,

Andrew W: Like even like, because I care so much when things don’t go well, I get so much more bummed than most people who aren’t as invested. and that’s,

true for everything. Like if I lose a chest now that I care about chess, I get so down and upset that I refuse to go to sleep.

until I wind against somebody.

Good. And I’ll go on test.com and I’ll keep going. Do you feel that? And how do you deal with that?

Andrew M: not like the Michael Jordan of like, if you want to, people would say that MJ would like, if you were flipping coins, you know, he’d be just like you described. Like, he would be super pissed if he lost, I guess I’m like pretty good at compartmentalizing. Like I’m going to go as hard as possible. And if I lose, then I’m going to move on.

You know, I’m going to do something else. Um,

Andrew W: how do you keep your sense of self worth when you’re investing so much of your time and so much of your identity into this thing, and it’s not working, has that ever happened even to

Andrew M: Oh, yeah, of course. Yeah. I mean, I, I started a hair restoration company where I moved to New York, which is a place that I really despise living for many reasons. Um, I was in a long distance relationship. It was some of the hardest four months of my life and it. You know, and I came home, um, but now we launched local kitchens.

And so I think as long as you’re alive, there’s always another chance. And you just keep going. It’s the kind of like die trying thing.

Andrew W: that you’re talking about, right. The hair restoration company. And so then why were you able to keep going? Why didn’t you, I think this was less than a year that you spent on it. Why did you give up at that point? And I know giving saying give up is a loaded word, but

Andrew M: No look, I totally gave up, totally gave up. Um,

Andrew W: So take me through that low point and then how you got through it so that I can understand that part of you too.

Andrew M: it was pretty calculated, right? That was bootstrapped. So it was like, look, I’m going to spend, um, you know, six months on this and 50 K of my own money. And these are the metrics that I want to see. And there’s some flexibility. Maybe if I didn’t hit all those metrics, but I saw something telling me to keep going.

W with that in particular, ultimately we felt like the female hair loss market was a better market, um, because they’re much more motivated and more price insensitive. And at that point I felt like, yeah, we should go exclusive on the female market. I don’t have a ton to add on that. Um, and then I was going to kind of stay on like consulting, but me and my co-founder didn’t agree on, you know, what the percentage should be.

And, um, I also felt like it was a smaller business. And so it’s like I could go back to Silicon valley. Um, build something bigger. So, um, you just keep going. I mean, just the opportunity to compete. Like I just, you know, if you’re alive and you’re breathing, like you can keep going. And I don’t there’s, I guess I’ve had so much judgment in my life or what I thought was like judgment that now I’ve always been someone that.

Dance to the beat of his own drum. You know, I think like the weirder and crazier you are the more for me, the more right. I am the more,

Andrew W: thing about you. You don’t seem that weird. You seem like a well adjusted person.

Andrew M: um, maybe just from a commitment standpoint, like, you know, when I was at door dash, if you called me to do anything that wasn’t door dash go to dinner or whatever it wasn’t going to happen. I think I have a really extreme ability to focus. Um, and you know, I think general people would say, that’s kind of weird.

Why do you wanna work on Thanksgiving? Why do you wanna work on Christmas day? And not only feeling like, oh, it’s not like, oh, I have to work. It’s like, I wake up and this is actually what I want to do most, like I’m actively choosing this and I actually. Working on Christmas is better than hanging out with you.

People who are like asking me to hang out, like this is what I prefer to do.

Andrew W: I feel that, and I do understand how other people would be judging it and wondering if you’re lying about your feelings towards it. Right. And then I also felt later on that I was giving up a part of my life. It wasn’t about the holidays. It was, I hadn’t developed real close friendships because I’d spent so much time working.

I hadn’t developed anything personal. Did You feel any of that at the end of door dash?

Andrew M: You know, one thing I think that’s really hard about life is that it it’s mutually exclusive. Like you can’t like be the best at something, like be a great family, man. And then like, you know, build the best company that ever existed at the same time. There’s different stages. Like you could look at, I mean, I don’t know any specifics, but you could look at like Bezos and once Amazon gets bigger, He can have a family and he has more resources and stuff like that.

But, um, yeah, I mean, there are definitely times where there’s maybe I’d rather ride my bike a little longer or something like that, but, um, I guess I know the prize and I’m like comfortable with the trade-off, but it’s a, it’s a big, big trade off for sure. Like I’m 35.

Andrew W: end of all this

Andrew M: It’s just that feeling, you know, like the, the door dash IP, I’ll tell you this, the, the day.

I would almost get emotional about this. And I did the day, the day door dash IPO. No, I called my mom and I told her the amount of money that, that it was worth. And she just, she just lost it.

Andrew W: Yeah.

Andrew M: Started crying. And, you know, in that moment, you think about all the tough times in high school and getting suspended and like all this bullshit.

And it’s just this, like this validation that like her and I, like we did it, you know?

Andrew W: Yeah. But all the times that she could have said this guy, he, I didn’t get a good one

Andrew M: Totally like she was

Andrew W: she believed.

Andrew M: that there’s a weird mother, son Von, right. Where they, they, um, they believe in you to an unreasonable degree, you know? Um, and so you have one or two people that like stand by you that’s, um, that’s it, you know, and so I think my mom’s a huge motivator, you know, like working two jobs to send me to college and, um, sending me to the best schools and, um, all this kind of stuff.

So.

Andrew W: about your dad?

Andrew M: We’re not super close they’re there together. Um, but you know, I think he, his dad was like, kind of world war two. They don’t, you don’t talk about emotions and feelings and that kind of stuff. So, I mean, we hang out a decent amount, but it’s mostly, um, surface level.

Andrew W: All right. I want to come back then and ask a little bit more about the behind the scenes stuff that someone who works for a VC backed company would only find out afterwards. But first, Um,

you were with Gusto. You switched to rippling. I think that it’s de class a to bring,

a couple of competitor in an ad for, for a sponsor, but I want to give people a legitimate view of it.

I tried both. I like both. Um, what do you, what’s your take on the difference between the two of them?

Andrew M: well, first of all, I used to always tell DoorDash PR all press is good press and they used to always tell me wrong. But I think it’s good. Um, we use Gusto, I think at door dash when they were something, some name before that. I honestly, I don’t remember to close. We use rippling. Yeah. Yeah. Zen payroll. Um, I don’t remember too much.

I mean, I guess there was like similar, I think to rippling super easy UI employees can understand that really well. It’s like very clear what’s going on. Honestly, we picked rippling. I didn’t really think about it too much at local kitchens. Like I had. Previously, I think they’re pretty similar.

Andrew W: The reason that I’m going to Gusto now and switching to them is I just want to simpler experience that I don’t want. Uh, Payroll, option that has everything in it that can distract me from the one or two things that matter. So I realized we’re not sending computers to people in need to keep track of the computers.

We’re not adding all these extra plugins. We just want to make sure that everyone gets paid And that, I don’t have to get sucked into the app in order to pay them. And then at the end for 10 99, that are. The or whatever, the, the, uh, tax paperwork is that they just get it and it’s organized and it’s quick and throughout. if there’s an issue I can get an HR, uh, expert on the phone to talk to them. I think that the problem with competitors of Gusto is there, isn’t a human being on the phone that you could talk to. You have to sometimes bag in order to get to a human being. And when there’s someone’s payroll on the line, Andrew, I know that one of my issues is that

even, even when I was a kid, Like money was really important to me, but not urgent in the sense that if that I always had a, I always had a bank account, I always had access to money.

And so if I didn’t get paid for some reason for a month, It wasn’t an issue, but I know that for other people it is. And my sister used to have, to tell me, look, if you owe me a hundred dollars,

you better give me the a hundred dollars when you owe it to me, because that’s a significant thing for me. If you and your brother like me and my brother,

if we all, each other a hundred dollars and we don’t pay for month, it paid out, it’s going to, it’s not an issue. um, and so I

want to be incredibly sensitive to, people’s never missing a payroll for even a small issue, and that’s only gonna happen if there’s clarity on the software that makes it easy to hit send that makes it easy for them to see what’s there. It makes it easy for me to get a human being on the phone.

If for some reason, one of the other bank accounts that we signed up for, it doesn’t work. Anyway, all of that is to say, I like the simplicity of Gusto. I like how many people who I’ve interviewed have used it and I recommend it. And if anyone out there wants to use it, you can try for three months for free.

Now is a good time of year to switch. Uh, the end of the year, beginning of a new year, you want to start fresh and you want to have a good experience for your people. If you go to gusto.com/mixergy, you’ll get a great experience right from the beginning. And they’ll let you start with three months for free, but frankly, they’re so inexpensive.

That’s another benefit, not a huge expense software that works gusto.com/mixergy. If you want to try it.

for free right now, and by the way, it’s also for, if you have contract. The work with them too, if you have only contractors that work with them too, if You have all only a W2

the word, all right, let’s go on to, uh, the issues. you had friends who sold their shares. You told me for $400,000, They could have held onto it and made 6 million. I think there’s some issues involved here. with Like when you exercise? stock. Right? What uh, what type? Talk to me about some of, the issues that you’ve learned now that you’ve been

Andrew M: yeah, I mean, I’ll break this down. Like it’s not, it’s actually hard to get rich on. Startups for a lot of reasons, one, um, tax, right?

So you get options from a company and you need to exercise those options. So it’s kinda messed up where if it’s designed for the rich, um, there’s one nuance of it. That is important. When you leave a company, typically you have three months to exercise. These options, right? And your bill could be tens of thousands of dollars, right?

This is what standard. Now at local kitchens, we made that a 10 year window because we said, look,

Andrew W: someone leaves. They don’t have to exercise their stock for the next 10 years.

Andrew M: that’s right. The idea is that there will be a liquidity event within those 10 years and they can do what’s called a same-day transaction and they don’t have to have this like, upfront money. Right.

Andrew W: With same-day transaction, you exercise the option, you get a stock and you get to sell it Right. away and you don’t have to put up the money for it or pay taxes

Andrew M: you will pay taxes though. That’s the downside is that you’ll pay, but not before the downside is you’ll pay ordinary income. So instead of cap gains, um, but it’s like better than losing, you know, your equity. So, I mean, I had friends who. Left the company and just didn’t exercise altogether because they either didn’t have the money or maybe they didn’t believe in the company at the time.

And so they forfeited, you know, all of their equity and they basically just worked for a lower salary for awhile. Um, and then there’s other people that are kind of handcuff there because the other tricky thing is this AMT thing where the spread between your strike price. So when you get hired today, the strike price, let’s say it’s.

And then in four years, the strike price is like a hundred dollars. The spread there, the difference, the $99, the government essentially taxes you on that. It’s called like Phantom tax. Um, even though you don’t have the money or the liquidity. And so once that spread gets really, really big people can’t really exercise it because the tax bill is like so big.

Andrew W: And so what did they do about that?

Andrew M: They stay until there’s a liquidity event. Um, and companies have different perspectives that, you know, they don’t want to do the 10 year exercise window. They want to do the three month because it kind of golden handcuffs people. Um, so that’s tricky. And then the last thing I would say is companies, when they get into the later stages, they’ll do, um, what’s called like a buyback.

So, you know, like Stripe is a good example, right? Like Stripe was founded in 2008. It’s now. 2021. Imagine you work there when you were like 25 and now you’re like 38 and you’re like, I’m going to be dead in like 30, 40 years. And I don’t have any liquidity from this company, like this sucks. Um, and so they’ll do a buyback.

You know, the company will actually create a price like door dash did. Um, it’s at a discount of like whatever the preferred is. And so at that time you could sell your door dash equity, and let’s say the people who sold it for 400 K, it was like, maybe that was more money than they ever thought they would have made anyways.

Um, and then the pandemic comes and all this crazy stuff happens. And door dash stock goes up and up and up and they miss this like, you know, 20, 30 X opportunity. My personal perspective is if you’re joining us. Swing for the fences hold. As long as you can swing for the fences, otherwise it go to a big company and get paid 500 K to a million a year and build your wealth that way.

Andrew W: You’re saying this is your one chance to go all in fully, go in all fully or else. Go take a different thing.

Andrew M: Yeah.

Andrew W: That’s hard because so much of your life and your finances is already tied up with the company just by being an employee, But.

being an employee, pleasant, not a stockholder, but an option holder.

It’s a lot of risks for one company. When some random thing can happen that has that you have no connection to.

Andrew M: I mean, it, it, yeah. I mean, like I could speculate on door dash that if COVID doesn’t happen. And, um, some other things that I think had a, probably a pretty big impact, maybe it’s worth a lot less. Um, for me personally, though, my life was designed around this, right. I lived in a studio in San Francisco for nine years.

900 a month. One time I got raised $25. Like I didn’t have kids, I wasn’t getting married. I wasn’t buying a house. Like I was completely optimized for this, my whole goal. When I read, um, snowball, the Warren buffet book. And I read that his goal was to like retire by 35. I read this and like I was 23 or 24.

That was it for me. I was like, I’m going to do that. You know? That’s that makes a lot of sense. Right? I don’t want. 60 years old, trying to request time off from some bozo. that’s not my path, right?

Andrew W: Yeah. Yeah. Why not, if you’re doing that, do it for your own company. Why not? You’re in San Francisco, you’re in

Andrew M: this is such a good question. And I’ve started companies and I’ve also worked at, you know, one of the fastest growing companies of all time, which by the way, I, again, I joined because these guys were working in a house and I thought. Not because I thought it was obvious that I would be rich. Um, you, you, just need to join like a very successful company.

I mean, I probably made more money at door dash than many founders. Right. I’ll give you a great stat. So at IPO, I think it was around 200 people at door dash cleared 10 mil, and like over a thousand people cleared 200.

Andrew W: 200 people got more than 10. Wow. Okay.

Andrew M: And like a thousand clear, more than a thousand, I think cleared, um, like a million. And so, so imagine how many people cleared 50 million, you know, let’s call it another twenty, thirty, forty, who knows? Um, so the point is like, if you can be a contributing member on a really strong team from a purely monetary perspective, like you can make plenty of money.

And if you found, um, and there’s no product market fit when you start, like, it’s probably a lot more variable, right? I’ve started what three companies now,

Andrew W: Right.

Andrew M: don’t think, I, I just think that the anchor should never be well there’s no should or shouldn’t, but for my life, it’s never been like how to make money.

Like I want it to be rich and I was planning to do that through basically investing long and like real estate. And I thought I could do it. You know, 35 or 40 or something like that. I didn’t necessarily plan on this big, lucky thing that happened to me.

Andrew W: then where’d you get the idea for local kitchens?

Andrew M: So my co-founder John and Jordan, they really wanted to work in. And as I said, you know, I was like, look, whatever it is, you guys are two of the most elite people. I know I want to work with you. Um, I’ll do it. And then I’ve learned with starting companies, you really need to stack the deck. And so w we have advantages and that we’re the early door dash team.

We’re, well-known well-respected we can attract capital. We know a lot more about the space. We’re still super close to, you know, our, our door dash friends. Um, And so we just started looking at problems of merchants and then the expansion thing came along. And then, um, the thing we realized, two things, one was the opportunity for multi-brand ordering.

So, you know, ordering from the melt and seasick all in the same cart. Um, and then really the vertical integration thing. So if you go all the way back, you know, grub hub started in like what, 2004, pretty incredible. They put menus online. But only 15% of restaurants deliver. And that was their thing. They work with restaurants that deliver, right.

They don’t have drivers or anything else, but that was incredible at the time. And then door dash comes along and says, what if we put everybody online? You know, literally everybody, they dramatically increased, um, the, the availability of merchants that could deliver. And so we feel like, well, the next step is what if you could put any food anywhere?

Like what if we could show up in. You know, some suburb of Austin and pick some cuisines that didn’t exist and we can just put them there. And it’s more nuanced guest selection, you know, it’s this idea that Bezos says that customers are like divinely discontent. So like grub hub started and they’re like, this is pretty sweet dash started.

And they’re like, this is pretty sweet. And so I think this could be the next kind of frontier of, um, you know, food in the space.

Andrew W: I get it. I can see actually that there are just, there’s certain restaurants that don’t exist in a place. Like

I don’t see Burmese food, for example, in Austin, as much as it’s really good about having exotic and interesting food. some of the food that I had when I was in San Francisco, I really missed. and you’re saying, all right, why should we wait for,

someone with any Burmese experience to say, I want to move to Austin and open up a restaurant and know how to do it and figure out where it is Why don’t we just say, we seen that this type of person likes it.

Burmese food, let’s explore bringing Burmese food.

And this is a brand that works. I

Andrew M: Like what if we brought Burma superstar to

Andrew W: Yes. That’s what I was thinking

Andrew M: that would be crazy.

Andrew W: I fucking love that. Yes. Do that please. Um, oh man. Um, my mouth is just watering thinking about it, but then you see That.

there’s already ghost kitchens, right? And you got Travis Kalanick. The guy behind Uber was super aggressive jumping in, and he’s saying we don’t need to have space where people can walk. Why aren’t you saying he’s already figured out the next step of this. Let’s let Burma superstar invest in, in the hiring people. They’re going to know how to do it better than we could. Why not say this has already been done.

And, um, why are you not afraid to be in this space? I guess is the

Andrew M: I may look. Yeah. Tra Travis is super legit, right? From, from my era of startups.

Andrew W: Yeah.

Andrew M: He, was up there right with Bezos and you know, anyone, right. One of the fastest growing companies of all time, we always looked up to them and then eventually at door dash suite, we competed with them. Um, w which was exciting.

I think, I don’t know their strategy and everything about it. I think what they’re missing, it seems to me, their company. Was built from like a kind of company first perspective, which is there’s distressed real estate, doing nothing. Let’s scoop it up and build kitchens and we can let people cook in them.

We are really from a guest first perspective, which same with door dash. It often leads the hardest road, like at door dash. It’s like, you’re gonna acquire drivers. You’re gonna acquire customers and you’re going to acquire merchants. It’s like, you’re doing too many things. It’s going to cost too much money.

You’re going to fail. do think there are lines though. Like we saw this with like Montreal is a really good example where they were basically DoorDash and they cooked food, you know, and to us that was like too much. They’re doing too many things. We were doing a lot of things, but it was kind of acceptable.

So our guests first perspective is look, they want multibrand ordering. They want food in the suburbs. They want to be able to pick up all these things. And that’s kinda what we built it for. They’re they’re pretty different companies.

Andrew W: Had you know, that they wanted to pick up.

Andrew M: I think if you look at some other examples of like dominoes and, and other companies, and you can see just that their pickup rate is higher Sweetgreen in suburbs, too. Um, it becomes pretty obvious. And then a lot of what we learned from door dash that, you know, there’s reasons you don’t pick up in cities because there’s no parking people don’t have cars.

it’s much more like utility type eating. Whereas in the suburbs you have kids, you put them in the car, you get out, you go in, um, it’s interesting, right? Like people who start startups in cities and maybe are less familiar with suburbs, wouldn’t see this as much, but this advantage of door dash, where we went hard at suburbs and we watched everyone else burn tons of money in cities.

Um, we just felt like it was.

Andrew W: Did you test it in some way? I mean, this is a pretty big investment.

Andrew M: Yeah, this is so funny. So we, we did, we, we basically said we’re going to run this experiment. I knew what would happen. I’m like if we get any traction, like then all of a sudden we’re just going to be running a company. So, um, we started trying to sign merchants. We signed proposition chicken in San Francisco, which was crazy because it was just the three of us, three tech tech guys.

They wanted to start within like a week. We were like, shit, we don’t have a kitchen. So we’re walking around Menlo park. This is in the middle of the pandemic. We’re asking kitchens, Hey, do you guys have extra capacity? Would you want to make some extra money cooking someone else’s food? The second place that we go to this guy is like, yeah, let’s do it.

When do we start? We’re kind of like, you know, when you’re pitching something, but you don’t really expect positive response and you’re, you’re kind of expecting them to say no and you’ll just keep walking. And so he’s like, yeah, when did we start? And we’re like, um, in like three days, so we go to profits, this and chicken, I bring a video camera, we video each dish, getting made.

We like document it all. And then we go to this kitchen in Palo Alto. It’s a, um, it’s a Singaporean recipe. And I bring my laptop and I show him the video and I like drive the food down there and a truck. Um, and we show them how to make everything. And then we kind of monitor it. We put it on door dash and we start getting sales.

And so we’re like, well, this is pretty sweet. We just bring the food there, get it set up. And then we don’t actually actually have to like, run the operations. Like this is kind of a.

Andrew W: this point you have, at this point, you have a ghost kitchen, essentially in a different restaurant, right?

Andrew M: Basically, that’s what it is. Yeah.

Andrew W: Okay. And that’s, and that’s the test and you list it and you start to see that sales come through.

Andrew M: And so, yeah, and then we, um, we raised like 80 K from one of the door dash founders, because we need to buy this chicken. And also one of the really crazy things was we, they had this minimum, like proper chicken gave us this minimum, which was like a million dollars in annual sales in. And we just kind of agreed to it because, you know, at that point you kind of have to eat shit.

Like, you don’t know if you can sell it, but you’re nobody. So you kind of just say yes, I was like pretty worried. I thought, man, we’re gonna have all this extra chicken and we’re not going to be able to sell it. Um, but we carry on, we start selling it. And so we thought that was the path. So we’re like trying to find other restaurants who want to cook someone else’s food.

Cause we think we have this great business. All we do is drop food off. We hang out and we make money.

Andrew W: And this guy, the Singaporean restaurant is going to create a proposition, chicken sandwich, proposition, chicken, deep fried chicken and salad. And just like it was anything else like, a Singaporean meal.

Andrew M: yeah. And he’s going to do it with their specs and we’re going to do quality control and make sure it goes well. And

all

Andrew W: when you’re saying that you’re committed to a million dollars, you’re committed to buying the million dollars worth of it, or the enough ingredients from proposition chicken to sell I

Andrew M: annualized run rate.

Andrew W: Right. Got it. Okay. So $300,000, $300,000 within that,

period, or else you have to pay them $300,000.

Well, not 300, whatever the

Andrew M: the difference,

Andrew W: is what you have to do, God. Okay. All right. And by the way, you, you mentioned getting $80,000 investment, you have enough money. Why do you need $80,000 from them? Why not put it yourself?

Andrew M: I always wondered this, like, um, Like people who’ve made money, like raise money. Um, I didn’t really think about it, honestly. I just, I guess it was like a total experiment and it was just kind of what we do and it was easy ish to get. Um, so I haven’t really thought about it. It’s a good question though.

Like if we raise a series B like, should I invest my money, but the other thing is like, as a founder, like I already owned so much of this. you know, even if I bought a million dollars of our equity, like it would be minuscule in comparison to what I’m like earning each day. So I dunno, I noticed it doesn’t maybe it just doesn’t really make sense.

Andrew W: Right. And it doesn’t seem like the investors would have pear capital human capital, general catalyst, uh, led around. Right. And S for this is the 25 million series a, it’s not like they need to see that you’re more committed than you already are.

Andrew M: Yeah, I think it’s more like, let’s say, like we couldn’t raise and we needed a bridge and I was like super bullish. Then I’d be like, all right, I’m just going to put 5 million to this.

Andrew W: Okay. All right. And so you get the money and now you’ve tested it. It’s starting to work. Do you get to the million dollar run rate? Do you, do you sell $300,000 worth of

Andrew M: well, so you back up and we start pitching other restaurants on, you know, cooking other people’s food and. Th they basically all say, no, they’re like super confused. They’re like get out of my restaurant. Like it’s like going really, really poorly. Um, but then what’s really crazy. So Ari, the founder at, um, at prop chicken, he’s the curator of food at outside lands, big concert in San Francisco and golden gate park every year.

So he knows all the hottest food. He starts making intros. He says religion. You know, he’s super amazing. Um, we signed more brands and we’re like, okay, we need a kitchen. And so at that point we start building, you know, a real kitchen and we’re pretty all in. And we raised like a proper seed of, you know, $3 million.

And, um, it’s still pretty experimental, like our first kitchen we built in Lafayette in the east bay. And it’s still very much like, we were pretty sure this will work, but you know, You have to keep going. And I think that’s, what’s important in starting companies is you can talk yourself in and out of anything at some point, like you just have to do it and see what happens.

Otherwise you’ll be like most people in, like, you just won’t do shit.

Andrew W: Okay. And so is this the first place that you had? Um, let me see if I could show you by just holding up my iPad. Can you see my iPad well enough to see is that the first

Andrew M: yeah. Yup.

Andrew W: and this was, it looks like it was already a restaurant. You just put the local kitchen’s name up on it. And then in the windows you put the different brands that you were, uh, that you were cooking.

Andrew M: Yeah, it was a cheese steak shop.

Andrew W: Okay. All right. And so you started doing it. What was it? There’s glaze in here. I’m trying to see, but it’s hard. Cause the picture

Andrew M: We had our R

Andrew W: is blurry.

Andrew M: we had prop chicken and CC. Um, mixed and, you know, we didn’t do too much construction cause we were still kind of testing it out. So the inside still looks like, um, a different restaurant and then actually like two months in, we paused it and did some construction to like put the sign on there that you see.

Andrew W: Okay. And then people were starting to order online and come in-person and the thing was working.

Andrew M: And then we built our own website to get some direct ordering. And, um, we got, you know, these enthusiastic reviews. This is amazing, all these kinds of things that were basically signals of product market fit. And so we felt like, okay, you know, let’s go.

Andrew W: Dude, orange, homeless. I never had it until like two years ago. I kept hearing about it. It’s fricking legit,

Andrew M: It’s legit.

Andrew W: but it’s only in Palo Alto. Right,

Andrew M: Well, I mean, now it’s in Palo Alto, Cupertino San Jose,

Andrew W: So, but, but dude, the thing I’m getting at is people have been talking about orange, homes forever. I just randomly was in Palo Alto. I try it. and go, This is amazing. Just like everyone said. Why didn’t the guy, take it over one orange, take it over to San Francisco, Why didn’t he take it over to Oakland? Why do they need you? Why didn’t they do this? before?

Andrew M: So they have,

Andrew W: them already,

Andrew M: yeah. They have a location in the city, but yeah, the general idea is like, why not expand themselves? I mean, there’s a definite amount of risk associated with a single brand restaurant. Like what if you open an orange hummus in mill valley? And like, it just doesn’t work.

Like you have this lease, you have all these things, you have this single brand concept, whereas for us, then we could just take you out and you didn’t lose any money and you didn’t really put too much time into it. And, um, you can test demand.

Andrew W: Uh, okay. I see. So You’re also, so you’re, uh, you’re bringing brands to the rest of the country, less expensively than they could do it themselves, You’re reducing the risk that they would have if they had it. you’re. Now piggybacking off of the delivery services that already exist, trying to create a brand name for yourself, and then eventually an experience. that people would just want to come in just like we, I imagine at some point it might be. Just like we go to certain food truck locations cause we want a different.

variety of food. We might just come over to local kitchens. That’s the future for you? And maybe you have some food that comes in just seasonally and goes out. Maybe you have other locals that are only known through you.

I saw your eyebrow raise when I said seasonal options. Right.

Andrew M: Yeah. We’ve kicked that around. I think that’s awesome. I think you could have this idea of a rotating brand, maybe one of the 10 slots. Um, this seasonal, I think that’d be great.

Andrew W: Fricking, I would love for you to bring Curry up now, here to Austin, orange, homeless here to Austin, man. Um, so now You’re hiring. I feel like one of the issues with working for you is First of all, it’s going to be inspiring because you’re, there’s something electric.

about. But are You expecting that the people work for you are maniacs. Like you were in the beginning where you’re sacrificing everything where you’re saying, this is the game we’re playing this until we fall down. until we win the game.

Andrew M: Yeah. I mean, I, I guess I wouldn’t tell someone like how to live their life. Like my job is to set the standards, you know, and I think the standards definitely require a certain amount of sacrifice and commitment.

Um, but if you look at the early door dash team, there were about eight of us kind of early, um, leaders, basically all of them have gone on to start companies. And so, you know, my pitch would be, look, come here. Build some confidence, some cred and come here for two or three years, and then, you know, go start your company.

They were all like extreme owners, right. We would launch cities, you’d launch Houston with two people and they would behave basically just like Tony and I, you know, complete maniacs, obsessive. Um, and so, you know, that’s kind of the pitch. I think there’s a, um, There’s this vibe of, you know, remote work and working a little bit and being on the beach and working everywhere anywhere you want and all that kind of stuff.

I still think there’s a lot of grinders in the country that, you know, want to make something of themselves and work hard and are not looking for like little work and like lots of money for doing nothing. So, um, that, I mean, that’s what we’re looking to build, you know?

Andrew W: It is exciting to be involved in something that it’s so all consuming, that you don’t want to pull yourself away from it. I’ve never gotten excited about a video game that people say is addictive. It feels nice and cute, but what’s the point, but about work, that is by the way, I’m going to be in your city.

Do you want to grab a beer?

Andrew M: Yeah, that sounds great.

Andrew W: Why I thought you would. What’s going on? That was a test.

I want to see if you gone lazy or something. I’m not going to be in your city.

Andrew M: No, I’m sure I can get something from this, from this meeting,

Andrew W: Oh, I see.

Andrew M: you’re highly networked individual.

Andrew W: All right. Good. I was just checking. I wanted to see

Andrew M: And obviously it’s going to happen at local kitchens.

Andrew W: I’d love to get a beer with you anytime. I can’t wait. You bringing it to Austin.

Andrew M: Yeah. You know, tentative plan is, um, a little bit more expansion in California. And then I think next year, um, Texas, for sure. You know, Texas is like becoming one of the most business friendly states. There is for a number of reasons. So it’s, and then California was kind of like the opposite. Right. So. I’m pretty excited for

Andrew W: You know, one of the reasons why I’m frustrated living here, I love it. But, um, it’s kinda like when I was living in DC and talking to, um, uh,

what’s his name? Uh, Justin con about his company, Can you bring it over

Andrew M: here

Andrew W: and no, he says I’ve got to stay here in the bay area because that’s where we are and I get it. And I feel like you miss out.

on a lot of innovation when you don’t live in the bay area, you forget how. I think people don’t realize how much innovation smacks you in the face. When you’re in the bay area, you just go to a restaurant and they’ve got some random new way to pay through a QR code. When other people don’t realize what a QR code is. I’m sure that there are people buying things in random ways creating it’s just so exciting that you could rent some,

I guess there was a period there where you could rent somebody a skateboard online. but It was only available.

in San Francisco. And I’d love that. I get to try that. All right, dude, I’m excited that I got to meet you.

I’m looking forward to coming back to, I guess it’ll be when I go back to San Francisco and getting into a local kitchen, um, and I’m looking forward to seeing how local kitchens does as it grows.

Andrew M: Sweet. Thanks for having me on Andrew. I appreciate it. This is super fun. I also, I would propose for you. I don’t know if you’ve done this. Um, have you ever flipped it and had somebody interview you? I was reading your bio about your journey and all this kind of stuff.

Andrew W: I would do it. If you want to ask me anything, if you want to come back and do another session, see what the response is. I like what one of your questions was, which was, uh, how many downloads, like yeah, we’re going to hang out,

Andrew M: do people think we’re cool or not? Yeah.

Andrew W: let’s find out what their response is. I’d love to see what that is.

And yes, I’m up for doing it with you.

And if there’s somebody else out there in the audience who ever wants to do an AMA, let me know. Um,

but, but Andrew, thank you for being on here and I’m looking forward to having drink. You bet. Bye.

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