An Interview With Fotis Georgiadis
Don’t do everything yourself. The first few years of Discotech, the Co-Founders were doing everything, including super low value work like customer service and guerilla marketing on the streets. While there is something to be said about being cost efficient and scrappy, we were probably too scrappy for too long. It is important to offload lower value work so that the leaders can be focused on bigger picture items that can really impact or transform the business.
As a part of our series called “Making Something From Nothing”, I had the pleasure of interviewing Ian Chen.
Ian Chen is the Co-Founder and CEO of Discotech, the OpenTable for Nightlife and Music Festivals. Ian began the journey to create Discotech in 2013 with his two co-founders, Mark Wu and Ian Bushong, who he met while attending the University of California Berkeley.
Thank you so much for doing this with us! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a bit about your “childhood backstory”?
I was born and raised in Potomac, Maryland to two Taiwanese immigrant parents. The immigrant mentality rubbed off on me as my parents strongly emphasized the importance of education and being scrappy. After graduating high school, I attended the University of California Berkeley, where I studied Business Administration as well as Industrial Engineering. From there, I began my professional career as a management consultant at Bain & Company out of their San Francisco office. After two years at Bain, I moved to Los Angeles to join a Private Equity Firm called The Gores Group. After my time at Gores, I started Discotech with some of my friends that I met during my time at UC Berkeley.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
“When life gives you lemons, make lemonade”.
It was during my time working at The Gores Group in LA that the idea for Discotech manifested itself. While frequenting night clubs in my spare time after grinding it out at work, I realized that it was extremely inefficient and burdensome to have to go through club promoters, these human middle men, in order to get reservations at nightlife venues. At the time, there were no apps or websites out there that made it easier for people to search events, get pricing, or make reservations at clubs in different cities. Discotech was ultimately born to solve my own problems as a customer. Hence, when life gives you lemons, make lemonade.
Is there a particular book, podcast, or film that made a significant impact on you? Can you share a story or explain why it resonated with you so much?
The movie Gattaca has been a source of inspiration for me. Despite being fictional, the movie motivates me to dig deeper inside myself when times are tough or when I think I hit a brick wall. The main character Vincent Freeman shows how powerful discipline and perseverance can be, even when the cards may be stacked against you. There is a scene near the end of the movie where Vincent tells his genetically enhanced brother how he was able to beat him in a swimming contest, and it is probably my favorite quote in any movie — “This is how I did it: I never saved anything for the swim back.” While I can’t say that the cards have been unfairly stacked against me in life, I have used this quote for motivation to power through many of my own setbacks, including having to deal with the pandemic while being in a nightlife/live events business.
Ok super. Let’s now shift to the main part of our discussion. There is no shortage of good ideas out there. Many people have good ideas all the time. But people seem to struggle in taking a good idea and translating it into an actual business. Can you share a few ideas from your experience about how to overcome this challenge?
The first step in building a business is in many ways the hardest. I think a big part of this is tied to the risk of failure and the opportunity cost associated with “going all in”. To this, I would say that a good way to mitigate this is to dip your toes in and test the waters before quitting your day job. Discotech was started as a side project while my Co-Founders and I kept our full-time jobs. We each carved out some time on the side to push the idea along and to validate our idea. Once we started to show a little traction, it gave us the conviction that we needed to quit our jobs and go full time on the company.
The other biggest challenge with starting a company I believe is building the right team. Running a company is hard to do by yourself. Are you able to find people in your network who have complementary or supplementary skill sets to help you kickstart the business? You don’t have to shoulder all of the responsibilities yourself and executing on an idea may become a lot more feasible and manageable if you have someone you trust working alongside you. If you don’t have people in your network that could be good partners/co-founders, then you may need to expand your network!
Often when people think of a new idea, they dismiss it saying someone else must have thought of it before. How would you recommend that someone go about researching whether or not their idea has already been created?
I think in this day and age, it is very quick and easy to see if there are already strong players in your vertical. A quick Google or Amazon search should give you an idea of what the market landscape looks like. Even if you do find a competitor or competitors working on the same idea, that isn’t necessarily a bad thing. For one, it validates that the idea may be worth doing. Secondly, you need to ask yourself if any of the players have a dominant position in the market already. If it is a large market and there are players with very little market share, then it is still very much possible for you to compete and have a successful outcome. Most good business ideas have numerous competitors in the field, and very few businesses are “winner takes all.” You have to define what success means for you, if it is having financial independence and personal freedom, you can definitely accomplish that without being the number one or two player in your market.
For the benefit of our readers, can you outline the steps one has to go through, from when they think of the idea, until it finally lands in a customer’s hands? In particular, we’d love to hear about how to file a patent, how to source a good manufacturer, and how to find a retailer to distribute it.
Here are the steps that we took:
- Develop a pitch deck which outlines the vision as well as the business model (how we plan to make revenue and profit).
- Use the vision/deck to recruit Co-Founders. In Discotech’s case, it was critical that we found someone who could help us design and build out our product. (Find software developers).
- Develop a low cost / minimally viable wireframe (demo product).
- Pitch the demo product to nightlife partners who would become our first customers.
- Once nightlife partners were sold on our product and gave us confirmation they would use our services once we launched, we quit our full time jobs to pursue Discotech full time.
- Develop a minimally viable iOS app and launch on the app store. (This took a decent amount of time).
- Create marketing (social media, online, guerilla) to get the app into customer hands.
- Use initial traction metrics to raise funding and get the app into the hands of more customers.
What are your “5 Things I Wish Someone Told Me When I First Started Leading My Company” and why?
- Think bigger (go after a bigger market) — When we first started Discotech, we were focused on building a mobile app to make it easier for customers to reserve tables at nightclubs. This is a very specific niche with a much smaller total addressable market size compared to where we are today, which is selling tables, tickets, and guest lists to live music events (including nightclubs, concert venues, music festivals, and lounges). Gaining market share in any industry is going to be hard, the bigger the pie the easier it is to scale your revenue. If we had not expanded our addressable market, we probably would not have survived to today.
- Start simple — Looking back, we probably could have gotten our product out to market much more quickly and cost effectively if we had built a website before building a mobile app. Websites are generally cheaper to and faster to develop compared to native mobile apps. Furthermore, acquiring customers via the web is generally easier/cheaper as well — it is easier to get a customer to click on a website link compared to getting someone to download an app. Additionally, the earlier you get a website out, the sooner you start developing your SEO which is a great way to acquire customers on the cheap.
- Do something with high gross margins / sexy unit economics. One of the challenges of scaling our business is that our industry generally has a standard 10–15% commission for inventory that we sell on behalf of our clients. Having low margins makes it hard to do things like affiliate marketing, because there isn’t much pie to share down the value chain. Many businesses that sell a product or provide a service have gross margins that are multiple times higher, making it a lot easier to scale into profitability.
- Don’t do everything yourself. The first few years of Discotech, the Co-Founders were doing everything, including super low value work like customer service and guerilla marketing on the streets. While there is something to be said about being cost efficient and scrappy, we were probably too scrappy for too long. It is important to offload lower value work so that the leaders can be focused on bigger picture items that can really impact or transform the business.
- Outsource overseas where possible — We have found incredible employees overseas to handle parts of our business operations such as customer success, data entry, and receivables collections. They work hard, are eager to learn, and cost 70–80% less than hiring domestically. While we would love to create more jobs in America, the reality is that running a business requires you to keep expenses lean wherever possible. Outsourcing more of our work overseas earlier would have also allowed us to perform item #4 much earlier.
Let’s imagine that a reader reading this interview has an idea for a product that they would like to invent. What are the first few steps that you would recommend that they take?
- Do a deep dive of the market and the business model. What are the most important assumptions that you are making and is there a way to validate them before diving into building the product?
- Find a reliable mentor, someone who has done something similar before or who may have tangential expertise. What are their thoughts and what do they recommend? There are people out there who can save you a ton of effort and heart ache if you can pick their brain.
- If you are ready to officially start the company, TALK TO A STARTUP LAWYER to get your company set up properly. This will save you and your team a ton of headache, effort, and money down the road — trust me. We tried to “bootstrap” all of our company Founder agreements, board documents, and other legal docs and it ended up biting us in the butt many times over the first few years.
There are many invention development consultants. Would you recommend that a person with a new idea hire such a consultant, or should they try to strike out on their own?
I can’t speak to the consultant route, but again I do believe that a Founder can benefit a lot from having a mentor, someone who has walked the walk in the past. It really depends on what you have to give up and how much expertise and passion they have for your project. What is the trade off?
What are your thoughts about bootstrapping vs looking for venture capital? What is the best way to decide if you should do either one?
If you can grow your business profitably without raising money, more power to you and more control to you. I have always heard from people with more expertise than myself that if you don’t need the money, don’t take the money. However, many companies would also have an easier and faster road to scaling their business, and a greater chance to succeed if they are well capitalized. Again, each business is unique and Founders may have different goals or definitions for success.
Ok. We are nearly done. Here are our final questions. How have you used your success to make the world a better place?
First off, I would not consider myself a successful entrepreneur yet. However, our product Discotech is helping customers save time, money, and have fun. Coming out of the pandemic, this is more important than ever as people start to become social again and heal emotionally. Our product has over 10,000 reviews on the app store and has a 4.9/5 star average rating. We are delighting our customers and helping people let loose and enjoy life a little more, I think that is noble work!
You are an inspiration to a great many people. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger.
Tough question, but I think the two of the most important issues facing our current generation and future generations are surrounding climate change, and the impact of social media. Both governments and individuals need to be more motivated to do their part in curbing climate change, or investing in new technologies or scientific approaches to reverse it. I also believe that social media is a huge epidemic in modern times and its negative effects have blindsided human society. More research and oversight/restrictions are necessary to prevent massive amounts of mental health issues for future generations to come.
We are very blessed that some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US, with whom you would love to have a private breakfast or lunch, and why? He or she might just see this if we tag them.
Despite all the crazy personal drama surrounding him, I would still have to go with Elon Musk. He is just such an inspiration and once in a generational entrepreneur / leader in innovation.
Thank you for these fantastic insights. We greatly appreciate the time you spent on this.
Making Something From Nothing: Ian Chen Of Discotech On How To Go From Idea To Launch was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.