Sneaker marketplace GOAT (“The Greatest of All Time”) reached 1.2M members in December 2016. GOAT has gained mindshare quickly since their launch in July 2015, earning the trust of passionate sneakerheads in a space historically riddled with safety and authenticity issues.
In a recent interview, Daishin Sugano, Co-founder and Head of Product Design shared how GOAT is disrupting a fragmented sneaker market by addressing trust and safety, how they built initial supply on both sides of their marketplace and shares an unusual advertising technique that led to crashing servers and thousands of new customers overnight.
What was the state of the industry when you started exploring the idea for GOAT?
Daishin: Prior to GOAT, eBay was the online destination for buying coveted sneakers. Some enjoy the hunt, but for many others buying on eBay has become convoluted and dangerous.
As a buyer, you begin a search (and ignore irrelevant searches due to keyword stuffing), then sift through hundreds of the same shoe in the same size sold by different sellers, with different photos of the shoe and different feedback scores, different pricing and varied shipping times and costs in order to make a calculated decision. It’s a lot of work and even with an experienced eye there’s no guarantee you would receive an authentic product, as I discovered.
There were also brick and mortar shops, where sellers drop off shoes that are authenticated at the counter of the shop, then posted for sale. However, most brick and mortars don’t have the technology and supply is constrained by lack of storage space. They also have the highest seller commissions in the industry, which results in the highest prices for consumers as well.
How did you start tackling all these problems?
Daishin: There were a few main issues at the top of our list:
How do you use technology to get an edge?
Daishin: We use technology in all facets of our business, but we focus a lot of attention on improving operations. For example, we ask sellers to take seven specific photos of each pair of sneakers to capture every detail on them. This allows us to build a big rich database about what makes a sneaker real and what doesn’t. We can then use this information in conjunction with image recognition, for instance, to help us quickly activate a seller’s listing for sale. Technology is in our DNA and continues to be the backbone of the company.
How did you build supply on both sides of the marketplace when you first launched?
Daishin: We focused first on the seller side because we knew if we had the supply at competitive prices, we’d be able to acquire buyers on the demand side. Sneaker resellers also often happen to be buyers, so we kill two birds with one stone.
To attract sellers, we created exclusivity by requiring people to ‘Request to Sell’. Early on, sellers on the waitlist started talking about the platform, trying to figure out ways to get approved faster. Tips on how to get approved started showing up on sneaker forums and through social channels — lot’s of earned media. It also gave those who were already approved bragging rights, helping fuel the organic traffic through word of mouth. Within a few months, we had a decent amount of supply and demand started growing as well.
Did you grow steadily over time or did you something catalyze your growth?
Daishin: We launched in July 2015 and for the first few months the USPS postal lady showed up with 3 or 4 boxes every day, sometimes up to 10. When Black Friday rolled around, we decided to run a promotion. Yeezys had just been introduced and were the most coveted sneaker at the time; they retail for a couple hundred dollars, but were selling for $1K+.
We thought it would be nice to do an end of the year thank you to our members by giving them another chance to buy the coveted sneakers at their original retail price.
Nobody had ever done this before and we just went for it. It got picked up in all the sneaker publications and we had over 100,000 new users download the app. There was so much traffic our servers crashed almost every day. We could hardly keep up and people were upset with us. But, we learned a lot from it and people really began to see our value proposition. Since then, we’ve been growing fast mostly through word of mouth.
And how did you come up with the name GOAT?
Daishin: There were three of us at the Grubwithus office on the last night we had the space. We were throwing around names for our sneaker marketplace and nothing felt right; the ideas were getting so bad we thought it might be better to give up and just keep building the product.
We wanted a name that would resonate among those within the sneaker scene, but whose meaning would be more hidden to the general public.
After kicking around more ideas, we landed on GOAT, “The Greatest of All Time”. The simplicity of the word and who it represented (Michael Jordan, Muhammad Ali, etc.) fit well. And, overall what we emulate within our app experience itself, to be great.
To read more from Daishin on getting through a tough pivot and the story of finding the idea for GOAT after a frustrating encounter with a pair of fake sneakers, click here.