You are using an older browser version. Please use a supported version for the best MSN experience.

How one immigrant started a $78 million dollar company from his parents' basement

CNBC logo CNBC 7/30/2016 Marguerite Ward
© Provided by CNBC

Success didn't come easy for Harrison Tang, the CEO and co-founder of Spokeo — but he never backed down from a challenge.

When Tang first arrived to the U.S. from Taiwan at age 13, he didn't speak any English and desperately wanted to go back to his home country. To learn the language, he copied pages from the dictionary and read Jane Austin books.

He ended up getting into Stanford University, where he studied electrical engineering and met his future business partners. Right out of graduate school, Tang and his co-founders Eric Liang, Ray Chen and Michael Daly launched Spokeo, a leading people search engine, from his parents' basement in California.

But the team had to pivot from their original idea and survive near bankruptcy before finally reaching profitability. Now Spokeo has more than 18 million unique monthly visitors, and posted $78 million in revenue for 2015.

"My dad, he always wanted me to have the attitude of solving problems," Tang said. "It was about not giving up."

It all started in 2006, when Tang and his co-founders holed up in his parents' house in the greater San Jose area and began developing software. 

Spokeo had initially been conceived as a social media aggregation platform, a tool that helped people connect their different social media platforms on one page.

But they soon realized that people weren't very interested in their idea. At the time, MySpace and Facebook were gaining traction, further pushing the likes of Spokeo and many other platforms out of the game.

After doing market research, they realized that a search engine where you could look up people's contact information — phone numbers, email addresses, and social media platforms — showed more promise.

The team went back to the drawing board.

Excited about their second-generation idea, they started looking for funding — only to find closed doors.

"When you're a newbie right out of college, no one wants to give you the money," Tang said. "We tried, but venture capitalists turned us down or gave us very ominous terms."

In 2008, Spokeo nearly failed.

The team wasn't finding a good way to generate cash and was quickly running out of options.

"When you really need the money, when the light is flickering and is about to go off, no one wants to give you the money," Tang said.

So they turned to their respective parents and secured a total of $250,000.

"I had to go to my dad," Tang recalled. "The first thing he said was, 'I had written it off when I gave it to you.'"

He remembers his father then telling him, "Building a business isn't a sprint, it's a marathon."

"I took that to heart and we kept fighting on," Tang said.

Eventually Tang's father kicked them out of his basement, encouraging them to rent office space in the nearby city of Mountain View. The move helped Tang focus.

With the cash infusion from family members and a new location, the Spokeo team invested in developing a new business model.

Realizing that people were willing to pay for information on others, Tang and his team switched their strategy from an advertising model to a subscription model.

At the same time, they concentrated on a more intuitive user experience and bolstered their information sources to include historical records, criminal records and other public documents.

Business soon picked up, and today Spokeo has a team of about 200 people in its headquarters in Pasadena.

In many ways, it was Tang's ability to stick with it and pivot that ultimately led to Spokeo's success.

"I think the key thing is your attitude," he said. "Take [challenges] on instead of running away."

AdChoices
AdChoices
AdChoices

More from CNBC

image beaconimage beaconimage beacon