As LA Tech week approaches, it’s the perfect time to revisit a notable Office Hours episode featuring Eddy Lu, co-founder, and CEO of the unicorn ecommerce sneaker startup, GOAT. In this episode, Eddy Lu shares insights into GOAT’s remarkable success and provides valuable guidance on knowing when to pivot or persevere.
Eddy Lu, a serial entrepreneur, and his co-founder, Daishin Sugano, both Los Angeles natives, firmly believe that LA is the ideal place for GOAT. Lu explains that the city’s diversity of customers and experiences make it an excellent hub for launching a consumer-facing company. This uniqueness sets LA apart from other regions.
Before embarking on the GOAT journey, Lu and Sugano had ventured into various businesses, most of which were unsuccessful. They had even raised a Series A funding round of $6 million from Upfront Ventures for their first startup, Grub with Us, after participating in Y Combinator’s program. However, they faced numerous challenges and friction points, which prompted them to pivot.
Lu emphasizes the importance of being honest with oneself. Despite their best efforts to address customer feedback and remove friction points, the startup was still struggling. Lu recalls the pivotal moment when they decided, “It’s really time to move on.”
Their focus shifted entirely to launching the sneaker marketplace, GOAT, at a time when the sneaker reselling market was thriving. A pivotal moment occurred during a Black Friday event when they decided to offer the hottest sneakers of 2015 at retail prices, priced at $200.
News of this unique offer quickly spread through local sneaker publications, resulting in an overwhelming response. In just one week before the shoe release, GOAT added over 100,000 new users to its platform.
However, the platform was not prepared to handle such a massive influx of users simultaneously. Despite the initial backlash and user outrage, a trusted advisor offered a valuable piece of advice: “at this stage in your company’s life, it’s better to be hated than unknown.”
Reflecting on this challenging experience, Lu emphasizes that he would repeat it a thousand times over, as it marked a true inflection point for GOAT. Although consumers may have initially hated the company for the issues they faced, they also experienced the app and began to understand its value proposition.
As of today, GOAT boasts over 30 million members, a catalog of over 100,000 SKUs, and more than 2 million listings. Lu attributes this success to the pivotal moment when users started to understand what GOAT offered, ultimately leading to trust and long-term growth.