GOAT: From Pivot to a Pair of Sneakers


Sneaker marketplace GOAT surpassed 1.2M members in December. After launching in July 2015, GOAT has quickly gained mindshare among passionate sneakerheads, building trust in a space riddled with safety and authenticity issues.

In a recent interview, Daishin Sugano, Co-founder and Head of Product Design, shared what he and co-founder Eddy Lu learned from a pivot away from social dining app Grubwithus and launching GOAT after a particularly frustrating encounter with a pair of fake sneakers.

Why did you pivot away from Grubwithus?

Daishin: When we started Grubwithus we had just moved to Chicago and wanted to solve a problem with meeting new people post-college in a new city. We saw a lot of initial interest and excitement about the idea of meeting new people through food — after all, food brings people together.

Grubwithus piqued investor interest too. The co-founders raised a 1.6M seed round after wrapping up Y Combinator, followed by a Series A round a year later. But, things didn’t work out as they anticipated and the business model was extremely difficult to scale.

We discovered social norms are hard to break through. It’s easier to cancel last minute on a stranger than a friend and things come up; scheduling conflicts, someone gets stuck at work or gets cold feet last minute. On the other side of the equation, coordinating with restaurants in this case from an operations standpoint required too many moving parts.

When you’re struggling, it’s easy to get side-tracked trying to solve things in a revolutionary way. Instead, we had to really focus and ask some basic questions: “Do we still see this as a problem? Can we actually solve it in a way that creates a viable business?” In the end, we felt there wasn’t enough value to continue with the idea.

When you’ve fundraised and have employees and investors counting on you to deliver, it’s a lot of pressure. It can be easy to lose sight of where you are. The reality is that you may not be equipped to solve the problem or that it isn’t the right problem to solve. It’s hard to chalk it up as an “L” and feels like you made a big mistake. But, we knew the most important thing was to be truthful.

Identifying the need for industry expertise was a big lesson we took away from Grubwithus. For our next journey we wanted to find a space where we had authentic knowledge and deep understanding because it would create an advantage.

How did you find the idea for GOAT?

Daishin: Originally, I got into sneakers because I played basketball growing up. There was a player in the NBA named Michael Jordan and he was pretty good. My dad got me my first pair of Air Jordan 5 Grapes when I was 10 years old. Every time I slipped on and lace-locked the shoes, I felt just like Mike; it was amazing. From then on, every sneaker purchase I made was an important decision for me and my collection expanded. It remains my biggest passion and is how I express myself.

Around the time we were moving away from Grubwithus and thinking about our next journey, I had a bad experience with a purchase on eBay. Driven by nostalgia, I was buying a retro pair (where Nike and Air Jordan re-release an older version of a sneaker) of the same Air Jordan 5 Grapes from when I was 10 years old.

When the shoes arrived, I was so excited; I immediately opened the box and smelled them. There’s a very distinct Air Jordan 5 smell and it just wasn’t there. When I put the shoes on, they didn’t feel right. After buying a lot of the same sneaker style, you know what to expect when they’re in hand/on your feet. The details of the shoes and the Jumpman logo looked off, the pods in the back looked deflated and the laces were even different texture.

The purchase was my first pair of fake shoes and it was a total letdown. And, I wasn’t able to get my money back because eBay has a poor policy for reconciliation that puts the burden on the buyer and seller to work out any issues. The experience really affected me and for the first time I wasn’t excited to shop for kicks.

My co-founder Eddy and I talked about the experience and he started grilling me with questions:

“Does this happen to a lot of people?”

“Who did the best job outside of eBay?”

“Is there anyone leveraging technology to solve this problem?”

“How do people search for sneakers?”

It became apparent that the industry I loved was fragmented and unsafe. Many people buying sneakers were running into the same problems. There are entire subreddits, social accounts, and blogs built around how to spot fakes. People even post product SKUs in spreadsheets on forums like NikeTalk so others can find the shoes they are looking for. Essentially, everyone was piecemealing information together to find and purchase authentic sneakers.

We knew we could use technology to solve many of the existing problems and with the knowledge we already had in the space, we would have an additional edge. We also decided it was important for us to find an industry that serves a passionate and youthful generation. GOAT fit the bill and we knew we were onto something. We just needed to start building.

To read more about how GOAT broke into the fragmented sneaker industry and used an unusual advertising technique to catalyze their success, click here.