Eddy Lu is just happy to be here, which is as refreshing as it is rare in today’s venture-backed startup world.
As the co-founder and CEO of GOAT, a shopping app where sneakerheads can buy and sell rare kicks, Lu is fully aware of the low odds of success after multiple failed ideas.
“Most companies don’t come back to life after a couple pivots,” Lu said in an interview. “We’re very fortunate to do so.”
Today, GOAT — a sports abbreviation standing for the Greatest Of All Time — is a Top 100 shopping app for the iPhone with a cult following among those who collect rare and pricey sneakers. The startup just raised $5 million in new money led by Matrix Partners.
Just a couple of years back, though, this reality would have seemed like a joke. In 2010, Lu and co-founder Daishin Sugano launched GrubWithUs, a service aimed at organizing meals between strangers. The duo raised more than $7 million for the idea and expanded to new cities at a rapid pace because growth is what everyone wanted, or they thought.
A few unsuccessful pivots later, Lu and Sugano were left with around $1.5 million and one last shot at a new idea with their investors’ backing. They decided on the sneaker category because Sugano was a self-proclaimed sneakerhead, the kind that collects old Nikes in unopened boxes, and it was one collectible category that millennials still cared about.
It also helped that the startup’s investor, Greg Bettinelli of Los Angeles-based Upfront Ventures, knew a thing or two about marketplaces for used goods from his time at eBay.
People who want to sell sneakers through the app must send them to GOAT’s offices for inspection. There, an employee inspects the sneaker with the help of a catalogue of fakes to make sure it’s not a knockoff. A photo is taken to upload to the app, and the sneakers are mailed out when someone buys them. Lu believes the company can afford these expenses because of the high price of average orders.
GOAT launched in July and had a slow first month, with just $8,000 in sales; the next few months weren’t much better. Then came Black Friday.
The company sold rare sneakers — such as Kanye West’s Yeezy Boost 350 — at a low retail price in an effort to get people to simply download the app.
So many people signed on that the app crashed continually — “Every second, there were people saying, ‘Fuck Eddy Lu,’ ‘Fuck GOAT,’” the CEO said — but it was now a known quantity in the world of sneaker resale.
“For better or worse, it was responsible for putting it on the map.”
GOAT’s goal now is to slowly let in more of the 10,000 sellers on the app’s waiting list without compromising quality. At the same time, it still has to attract new buyers who are used to making these purchases on eBay or at brick-and-mortar stores like Flight Club.
On the financial side, Lu’s aim is more straightforward.
“By nature, I’m cheap,” he said. “It is my goal with the [new] money raised to be profitable.”