20VC: The Memo: Sequoia's Alfred Lin on Why Chasing GMV Leads To Bad Behaviours, How To Approach Competition and Capital Efficiency & The Core Importance of Understanding the Difference Between Input and Output Metrics

Alfred Lin from Sequoia discusses the firm's Series A investment in DoorDash, reflecting on lessons learned from initially passing on the seed round. Lin emphasizes the importance of founder-market fit, particularly Tony Xu's operational obsession and insight into suburban market density. The conversation explores DoorDash's early strategy of focusing on the suburbs, its differentiated approach to merchant selection by offering the largest selection, and its innovative driver acquisition tactics. Lin also highlights the company's resilience during challenging fundraising periods and its proactive response to the COVID-19 pandemic, including supporting restaurants and delivery personnel. He underscores the significance of balancing growth with sustainable unit economics and customer-centric decision-making.