PM mock interview: Define success metrics for DoorDash

Summary

In this transcript, the speaker outlines a strategy for designing key metrics for DoorDash, focusing on the product's goals and the needs of its three primary stakeholders: eaters, drivers, and restaurants. The core metric is the total number of orders placed on the platform, while supporting metrics include active users, order frequency, and total order value. Additionally, the speaker discusses counter and guardrail metrics to address negative trends, such as cancellations, low ratings, and safety concerns. This comprehensive framework aims to ensure the platform’s growth, efficiency, and satisfaction across all parties involved.

Takeaways

• 😀 **North Star Metric**: The total number of orders placed per week is identified as the primary metric for measuring the overall success of DoorDash.
• 😀 **Stakeholders**: DoorDash has three primary stakeholders—eaters (customers), drivers (delivery people), and restaurants (food providers)—all contributing to the platform's success.
• 😀 **Supporting Metrics for Eaters**: Key metrics for eaters include the number of active eaters per week, average number of orders per eater, and the gross merchandise volume of all orders.
• 😀 **Supporting Metrics for Drivers**: Key metrics for drivers include the number of active drivers per week and the average number of orders each driver completes.
• 😀 **Supporting Metrics for Restaurants**: Metrics for restaurants focus on the number of restaurants with at least one order per week and the average number of orders they receive.
• 😀 **Gross Merchandise Volume (GMV)**: Tracking the value of all orders placed is important to measure the overall revenue potential of DoorDash.
• 😀 **Customer Satisfaction**: Average wait times and cancellations are critical to tracking customer satisfaction and preventing dissatisfaction.
• 😀 **Guardrail Metrics**: Metrics to ensure service quality include tracking ratings below 4/5 for drivers and restaurants, and monitoring safety issues reported by customers.
• 😀 **Order Completion**: Ensuring orders are successfully completed (not cancelled) is a vital metric, highlighting the platform's operational success.
• 😀 **Metrics Structure**: Metrics are organized into three categories: eaters (demand), drivers (supply), and restaurants (supply-side business), ensuring a comprehensive view of the platform's health.
• 😀 **Revenue Alignment**: All metrics are designed to reflect the company's revenue generation model, which is primarily based on commissions from orders placed through the platform.

Q & A

What is the primary goal in designing metrics for DoorDash?

The primary goal is to define metrics that track the success of the product and its ability to bring value to all stakeholders: eaters, drivers, and restaurants. The ultimate aim is to align these metrics with the company's North Star Metric.

What is the North Star Metric for DoorDash as discussed in the transcript?

The North Star Metric for DoorDash is the total number of orders placed on the DoorDash platform, as it reflects the core success of the company in terms of platform usage and revenue generation.

Why is it important to track the number of active eaters per week?

Tracking the number of active eaters per week helps measure the engagement of the user base. A high number of active eaters typically correlates with higher order volumes, which directly impacts DoorDash's revenue and platform success.

What does the gross merchandise volume (GMV) per week measure, and why is it significant?

Gross merchandise volume per week measures the total value of all orders placed on the platform. It is important because, even if there are many orders, if those orders are low in value, DoorDash and the restaurants may not generate enough revenue.

How does tracking cancellations help DoorDash?

Tracking cancellations helps identify potential issues, such as long wait times or order inaccuracies, that could negatively affect the user experience. High cancellation rates can directly reduce total orders and harm the platform's reliability.

What is the significance of measuring the number of active drivers per week?

Measuring the number of active drivers per week is important to ensure there is sufficient supply to meet demand. If there are too few drivers, customers may experience delays in receiving their orders, impacting the service quality.

What metrics are tracked for restaurants in this framework?

For restaurants, DoorDash tracks the number of restaurants receiving at least one order per week and the average number of orders each restaurant receives. This ensures that restaurants are engaged and generating revenue through the platform.

Why are guardrail metrics important for DoorDash?

Guardrail metrics are critical because they help identify potential problems that could negatively impact the user experience, such as low ratings for drivers or restaurants, safety concerns, or incomplete orders.

What does the order completion rate indicate?

The order completion rate indicates the percentage of orders that are successfully completed without cancellations. A high completion rate is essential for platform reliability and customer satisfaction.

What kind of issues are monitored through the reported drivers and restaurants metric?

This metric tracks safety issues and rule violations among drivers and restaurants, such as unsafe behavior or food safety concerns. Monitoring these issues helps ensure the platform maintains high standards and customer satisfaction.