Movers & Shakers
How Founder of Eventbrite Keeps Launching Hit Startups
Kevin Hartz, CEO of Eventbrite
One incredible theme which kept resonating with us throughout our talk with Kevin Hartz, the founder and CEO of Eventbrite, last Friday is his incredible desire to learn from mentors, role models, and other entrepreneurs around him. Even though he has built numerous hit startups, including ConnectGroup, which he started and sold for $10M in less than 10 months, Xoom which currently does $250B+ in money transfers, as well as Evenbrite which we all love and use today, he is still hungry to learn from other folks who are building product.
Kevin shared a lot of takeaways from his career. We talked about how a general manager at Hilton helped Kevin build his very first business—a hotel chain internet provider business in the 1990s. Kevin built, launched and sold the business for $10M in less than 10 months. We talked about his long friendship with Peter Thiel as well as investing into and learning from the PayPal mafia. We spent quite a bit of time discussing Eventbrite and the unique position it is in today. The highlights and podcast is below. Enjoy!
My "YCombinator" before the time of YCombinator
Kevin talked quite a bit about the importance of mentors. He shared a story with us of when he first got out of Stanford and had the idea of creating an internet provider business for hotel chains. Without the right connections negotiating with hotels required a lot of capital and connections. So Kevin approached one of the general managers at a Hilton in South Bay. The manager was forward thinking, liked the concept, invested in the idea and became the first marquee customer. The general manager helped Kevin get into other hotel chains. ConnectGroup was incorporated in April of 1998 and acquired by LodgeNet for $10M in October of 1998.
Investing in PayPal with Peter Thiel
Kevin mentioned that the most important lesson he has learned and employed is to surround yourself with brilliant people. Peter Thiel has been a close friend and mentor to Kevin from their time at Stanford. When Max Levchkin came to Peter with an idea for a mobile security company, Peter pulled Kevin into the discussion. Max and Peter stayed very agile early on, iterated a number of times on the idea, and eventually decided to launch a payments platform instead. Kevin was one of the first users and investors in PayPal and has stayed very close with the core team there. A lot of his own investing and startup advising is based on what he has learned working with Peter, Max and the rest of the team.
If you don't know your market - bootstrap until you do
Kevin mentioned that it was very simple to figure out the size of the market and the financial potential when he started Xoom. However, with Eventbrite it was much more of a challenge. Since you are dealing with long tail events, the potential of initial market was a leap of faith for them. As a result, Kevin did not take any investment and bootstrapped the company until they could figure out the size of the market. This is one piece of advice he recommends for anybody starting a business where you don't know the size of the market.
Changing the vision of the company
Kevin talked quite a bit about being agile and being able to change directions quickly. He is an old friend of Jawed Karim, the founder of YouTube. He loves the YouTube story which he shared with us during the talk. They launched as a dating site, thinking people would post video profiles and meetup on the site. It didn't work until all of a sudden they saw a video of a plane taking off over head which someone had posted on the site. A surge of traffic came to the site to check out the video. They changed their direction and decided to make the site open to anybody wanting to post a video. If they were stubborn and kept trying to build a video dating site they would have missed the whole market. Being agile and changing directions when you see the opportunity is part of building great companies.
Eventbrite taking on Ticketmaster
Kevin laughed as we asked him about Ticketmaster. Here is what he had to say:
We don't do reserved seating now. We will be doing that, we will roll that out. We have a lifetime work of capturing the long tail. You follow the path of least resistance. It has taken us internationally. Taken us to certain entertainment verticals such as Ventura stop last weekend where we sold 62% more tickets then Ticketmaster. Through lower fees, through customer service, social media distribution we won.
It's not going to be an overnight takeover. It was just a few years ago that Neflix won, that Blockbuster filed for bankruptcy. It will take time to take down Tickemaster. We love being the David taking down Goliath the silicon valley way. Sometimes the Goliath un-does themselves, they merge with bad partners, the loose their talent, they don't have consumer internet people running their business. This makes our lives a bit easier!
The discussion continued. We talked in depth about Evenbrite and what their next steps will be as well as the current IPO environment. We'd like to thank Kevin Hartz once more for such an engaging perspective on building products!
Kevin's work includes:
Eventbrite - which he founded and still runs today did over $207M in gross ticket sales in 2010. It's a pretty interesting time for. Eventbrite as they start to battle Ticketmaster head on. Black Eyed Peas have just sold out their show in Central Park by solely using Eventbrite. Many artists are starting to use the site for ticket sales.
Xoom - the money transfer company which is the previous company Kevin launched. It currently processes nearly $1 billion in money transfers a year.
Connect Group - the hotel internet access company acquired by Lodgenet which was Kevin's first company. It was sold for over $9.5 million within months of launching.