Meet Startup @TW

Taipei event speaker to broach the squeamish topic of startup failure – he should know

Messaging apps tend to connect users with people they already know, but the founder of one advocates building links between strangers who are chatting about similar topics.

Jason Goldberg, founder of the new social chat app Pepo, says he wants to "leverage the supercomputer you're walking around with" to reach other people chatting about topics or places of similar interest.

It's a daring proposition for a latecomer to the crowded mobile messaging field, but Goldberg's app will still let users message people who they already know.

Goldberg also has a record of taking risks. That's where his story starts and a topic of his address at an event in Taipei this month.

Goldberg will speak the Meet Taipei conference, which begins Nov. 17. He talked to Meet via Skype in late October while he and his team were launching Pepo. As he parried urgent messages from developers, Goldberg offered a sneak preview of the topics he plans to cover at the event and introduced his newest project.

THE NOT SO FAB YEARS

Goldberg had once earned a name for hatching Fab.com, a furniture e-commerce site whose meteoric rise and fall are known by some as the biggest failure in startup history.

Fab, which arranged sales of kitschy home items made by thousands of private designers, went online in 2011 and sold US$20 million of merchandise in its first six months. The next year Fab sold US$120 million and had raised US$330 million from investors.

By the third quarter of 2013 Fab was hemorrhaging money, and Goldberg, also the CEO, told the board most of the company's staff would lose their jobs.

Fab was spending too much money on unscalable assets, such as warehouse space. It also bought a European competitor. Meanwhile the service was getting few repeat customers.

Fab was ultimately sold to the custom manufacturing company PCH in a fire sale in 2015 for around US$15 million.

With that blot on his resume, Goldberg is quick to offer advice for other entrepreneurs in the midst of sudden exponential growth.

"Stay humble, don't let yourself buy into the hype, stay grounded," he said. Staying grounded is as important as being bold, he added.

"You need a certain level of confidence and gumption to build a service that grows,"he said. "It's a challenge, but you can't have one and not the other."

Those lessons from Fab might particularly resonate with For the founders and investors at Meet Taipei.

"One of the reasons that I was invited to come speak at Meet was the organizers, and a number of people I know in the startup community there, said that there still isn't the complete culture in the startup community in Taiwan around understanding, acknowledging and recovering from failure," Goldberg said.

"I went through a pretty public failure with the Fab story, and I think one of the things is...in Asian cultures, it's harder to publicly acknowledge that you failed," he said. To make a failure public, he said, an entrepreneur should "look at ways to understand it and embrace it -- and do so publicly versus kind of shying away."

The squeamish attitude toward startup failure in Taiwan is hardly a new issue.

Chris Lin, co-founder and CEO of Taiwanese music streaming service KKBox told techinasia.com in 2014 that failure was like a death penalty on the resume.

Contrast that attitude with once popular Silicon Valley cliche "fail fast, fail often," which conveys the idea that risk is integral to success but not every risk works out.

"It's not that we should celebrate failure. I don't like that notion of kind of, like, having a party because you failed," he said. "It's more that, it’s OK to acknowledge it and discuss it, and it's part of the entrepreneurial journey.

"Investors in startups, they understand this in some ways more than entrepreneurs," he added. "Because investors in startups, they don't expect every startup to be successful."

Investors tend to spread their bets, an acknowledgement that not every startup will succeed. The typical investor hopes a few targeted startups will be asymmetrically successful with a payout that covers the whole portfolio.

Failure is "not a blemish on their reputation...as long as you keep your personal integrity," the former FAB CEO said. "If the people around you think that you're honest, that you're learning, have some humility," he said. "That is one of the lessons I want to impart."

Goldberg paints a picture of the classic startup founder as a person struggling to reconcile competing impulses in search of a successful formula, particularly the balance between humility and confidence. Don't forget to create a viable product, too, he cautions.

"I would say that my perspective is, startups all come down to the product and the passion of the team to make the product successful," Goldberg said. "You can't compensate for a product that doesn't work.

"So, I would really emphasize to founders, in your early days just focus sights, exclusive of almost anything, on the product," he advised.

"And the ideal founder is somebody who is a product manager, somebody who's super passionate about user experience, about the technology, about understanding user behavior," he said. "Most startups succeed based on the founding team, or not. The idea is not the hard part, it's the ability of the founding team to execute on the idea."

Goldberg, now in his 40s, once worked in the White House cabinet affairs office. He later moved into high-tech and worked for AOL Time Warner and T-Mobile. In 2004, he founded the search engine Jobster.

NEW START WITH PEPO

Goldberg is trying to take his own advice as he launches Pepo, which was conscious response to his experience with Fab.

The Google Play Store says Pepo has garnered between 1,000 and 5,000 downloads.

Instead of trying to grow a business as fast as possible, Goldberg says he now wants to "get back to basics, provide something to users" and "take it a step at a time." Still, he has invested US$1 million of his own money in Pepo and spent 80 percent of the year to date in India with his engineers.

Goldberg has also found outside investors, including two from the Fab years, but he declined to name them.

Pepo organizes public and private chats, including between just two people, based on locations and discussion topics.

Fab should have grown more organically, Goldberg conceded. "With Pepo, the goal is to build something that could be a very large, useful service worldwide," he said. "Manage the company in front of you, not the one that you want to have five years from now."