I. Session Takeaways

Date: April 2024

Prabir’s Background

Join as CFO of Doordash in 2018. Took the company public and is currently the COO
Prior to DoorDash, he was at Uber and also worked in management consulting and investment banking

Foundational Elements of Great Planning

The ideal planning process maps the inputs to the outputs

The input is the actions taken and the output is your goal or target outcome
A revenue goal is a good place to start - it is a good all encapsulating metric for most businesses
The key is to tie the goal/output (revenue) to the actions required (input) to achieve the goal
Without mapping the inputs, you won’t have clarity of what actions are required to achieve the goal

Example: How Prabir uses inputs?

Context: You set a goal of $100M of revenue by EOY

Step 1: Build a walk to get from current scale to $100M revenue

In this scenario, $40M will come from existing customers and $60M from new customers
To achieve $60M, we need to sign X customers at Y ACV and generate Z pipeline
Build in additional margin for error (i.e., a walk that gets you slightly ahead of your target goal)

Step 2: Use the walk to start turning the outputs into inputs (actions) and determine dependencies

You go to sales and ask them if they have the resources (team) and products/features to reach the goal
Sales tells you they can sell a portion of the deals as is, but requires X,Y, and Z features to hit the target
You then go to product to prioritize features required to hit targets

A good planning process helps you map the inputs and align the dependencies within a company.

Build the planning muscle early to drive growth when organic pull slows down

When you have early product-market fit, organic growth is often enough to sustain 2x, 3x, 5x y/y growth.
As you scale, organic pull will slow down and you’ll need to augment it with sales/GTM-led growth initiatives
Build the muscle to drive growth early - and a big part of this muscle starts with planning well
If you naturally grow 2x y/y, that should not be the plan. You want to push the team beyond your natural rate.

Prabir on the building the muscle early to transition from organic to non-organic growth

“The organic product market fit will allow you to grow 2x, 3x, 5x. That’s great but eventually there will come a day when it decelerates. That’s just how life is, in the beginning there is a bunch of organic growth. There’s a point in time where you want to develop the muscle to deliver growth in excess of organic growth.”

Top down goals are critical. Complement them with bottoms up inputs.

There have to be top down goals - only the founder/executive team can set goals for the team
Complement top down goals with bottoms up feedback that provide input-level clarity for how to achieve a goal

Prabir on converting revenue goals to tangible objectives

“You have to have top down goals. That's where the process has to begin. The top down goals at its most simplest can be $100M of revenue, but we'll talk about why that in and of itself is insufficient. Ultimately, the bottoms up build is the work that I described that provides input level clarity on how you're going to get to the $100M”

Early on, goal setting starts with the CEO. Eventually, its a shared responsibility

The CEO dictates all of the goal setting in the beginning but that changes over time
The CEO job evolves and becomes more complicated and the responsibility for goal setting changes
At DoorDash’s scale, Tony shares high-level goals with Prabir and Prabir owns the process
At 30-100 people, the CEO should still be setting the goals within the company

Prabir on the transition to thematic goal setting

“In the beginning, [the CEO] is the person setting goals. You're 100% right. At our scale I understand my own limitations and my own depth of understanding of our own business. I try to stay to strategic thematic topics where I have conviction and I have done the work to have that conviction. I leave some of the details to the management team and other teams and so forth. Our CEO, it's not that he’s removed from the process. He saw my document and said he cares about these two things. The things he cares about are usually on a 3-5 year horizon. I then find a way to balance that in the plan.”

Creating tactical goals for new products

Set tangible step by step goals because early on you do not have data
Instead of setting a “revenue target”, set incremental targets to prove product-market fit (like your first product)
As an example, DoorDash is launching a new product for restaurants
- Instead of setting a revenue goal, Prabir initially set a new restaurant sign-up goal
- This first goal would prove whether restaurants would actually use the product
- Once they achieved that goal, Prabir set a new goal to drive X number of customers to that restaurant
- Keep creating incremental goals until you get to a point with customer love/recurring usage

Scaling customer centric planning

Start planning by writing down the customer outcomes you want to drive
These customer outcomes get worked backwards into financial outputs and inputs to drive action
Prabir does not use the term “financial planning” because the financial metrics are an output
Planning is really about how engineering, sales, and product work in concert to deliver customer goals

‍

Prabir on customer centric goal setting

“I showed up to a board meeting and presented a plan. One of the board members asked how is it different for me as a customer.’ I tap danced around that question but it stayed with me. The customer does not care about $80 million of revenue or $120 million of revenue [the plan], the customer cares about experience. ”

DoorDash’s Planning Process

Step 1: Prabir writes out a list of customer outcomes he wants to achieve in the planning period

Prabir starts planning by writing out each customer outcome he wants to drive for all pieces of the business
When he creates his plan, he sends it to the management team. It is a way to source feedback on his thinking
His team then reviews the document and shares feedback on what they can and cannot achieve in the year
9 out of the 10 times there is limited feedback. In some cases, people will suggest and/or make changes
At this point, the team has clarity on what Prabir/Tony want to achieve in terms of customer outcomes for the year

Step 2: In parallel, the CFO shares his top down revenue and profitability goals for the year

The CFO complements the customer outcomes with a simple top down view of targets for the year
While the financial inputs from the CFO are part of the planning process, they are not the key driver
The main driver of the process are the customer outcomes that DoorDash wants to achieve in the year

Step 3: Teams take customer outcomes and top down inputs and come up with a bottoms up plan

As an example, the sales organization will think about how many salespeople are needed to sign-up restaurants and will build a plan to achieve their goal. At DoorDash’s scale, the teams all have relevant finance business partners that can help with planning

Prabir on converting customer outcomes to tangible objectives

“I sat down, and wrote down all the customer outcomes I wanted to make true. I want you to go city by city in America and tell me the top 50 restaurants in each city and tell me which are not on Doordash and build a plan to get them on DoorDash. As a customer I want the most favorite restaurants in my city to be on Doordash”

Step 4: Marry the bottoms up plan with the top down goals

There is always a gap. 99/100 times the bottoms up plan will be lower than the top down goals
Work with the teams to address the gaps and lock in the plan for the year

Example: How Prabir would adjust this process to work at 50-100 people?

Start the same way. Write out customer outcomes for the year. At DoorDash’s current scale, he has 3-4 pages of outcomes. For a company with 50-100 people, he would expect more focus (i.e., 3 to 4 outcomes)
In parallel, establish a headline revenue goal, but make it clear that the revenue goal is an output metric. At this stage, you will also have to spell out the inputs for teams (e.g., we need to increase net retention to X or we need to acquire Y customers)
Assign a DRI to each input. At the 50-100 people stage just pick someone who has influence and can make things move within the company. Ask them to come back to you in two weeks with a plan to achieve their goal
In two weeks, have each DRI do a readout of what they’ve come up with. This will help you understand any dependencies and build a plan that accounts for the connectivity between teams.
- A note on format. Some companies do write ups. Some companies do presentations. More important is that the DRI comes back with some level of detail and thinking on how they will achieve the goal
Once you understand dependencies, lock in the plan.

Dependencies exist. Address them in planning to avoid delayed timelines.

When teams come back with their plans, try to tease out dependencies within plans
Bring all the DRIs in a room, align on dependencies, shake hands on commitments, and move on

Prabir on the “interlock”

“At the end of two weeks DRI one, two and three show up at your desk. And they do a readout in terms of what they have discovered. That allows cross connectivity with other departments. What I call the dependency in order to meet the goal to make the outcome a reality. This leads to a phase in the process called the “interlock”, which is okay if I want to get into these accounts then the product has to do these five things and sales has to do these two things. Are we resourced? committed? Everyone shakes each other's hands. We’re good. Now you have a plan.

Sources of tension in planning.

At DoorDash’s scale, the main tension is determining whether to feed the “babies” (i.e., new businesses) or to feed the mature businesses. The tension is the babies do not generate much cash today, but have potential to generate a lot of cash in the future. Managing capital allocation to meet short-term and long-term needs is their biggest tension point today.
As a younger company, your main constraint is your runway. In other words, the amount of capital you are willing to spend to achieve your goals will be limited by your cash in the bank. More specifically, there are things you could do that might make sense but would result in a burn profile or headcount increase that exceeds your envelope.

Prabir on tensions at different stages in company building

“There is always a tussle over if you feed the babies they are not going to contribute much revenue today but they could contribute 3-5 years down the road. So you have this near term long term tension. At a younger scale, your main constraint is your runway and how much capital you are willing to spend this year and the risk of actually achieving those outcomes”

Balancing efficiency with experimentation in marketing

Prabir sets a target at the portfolio level (e.g., this is what my portfolio level payback should be)
He doesn’t like to get into the channel details because he wants to give the team flexibility to experiment
Within that portfolio there are mature channels and new channels - its up to marketing to manage it
As the motion gets figured out, he begins to tighten the guardrails to keep pushing what is possible

Changing Product and Business goals in hyper growth

In hyper growth, it is OK to change business goals as needed. You don’t want to be beholden to the plan
The companies the can recalibrate their goals efficiently are the ones that grow the fastest
When a goal is met, it should be increased. Don’t waste the opportunity.
Be careful with changing product goals. Product goals have longer lead times
- If you are changing the product goals every quarter, then nothing gets built