About Kevin Hartz
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.
Transcript
Kevin: Finding mentors, finding those with trajectory, you don't always have to find the person who's accomplished 30 years of work. You can a lot of times see those sparks of brilliance of people on that very steep trajectory. A very important point of expansion and growth at any stage of the company is just don't lose sight of your core business.
Moderator (Dmitry): Super excited to introduce Kevin Hartz, the founder and CEO of Eventbrite and, of course, an avid entrepreneur. He's accomplished so much in so little time. Of course, started three businesses, advises so many others, started ConnectGroup, which was one of the first Internet providers for hotel chains, has started Xoom, which was a money transfer company, and, of course, Eventbrite, which we all use and love today. So with that, let's welcome Kevin to ZURBsoapbox.
Kevin, welcome. I want to start off with this recurring theme. You've accomplished so much. In your words, I think you said once that you're always learning from entrepreneurs, from investors, from people that are building products out there. That was sort of the trend across all these startups, starting back at Stanford, right?
So, let's go back to the very first startup, ConnectGroup. That was the very first. You came out of Stanford, you had this idea, and the idea was to provide Internet for hotel chains. Such a big idea. It requires you to have to pitch to hotel chains, you've got to create infrastructure. How did you get that going, and who was your teacher or person you looked up to, advisor there?
Kevin: First, I should say, thank you to Dmitry, thank you to ZURB for hosting us. Going off on a little tangent, ZURB is a design firm, and as we all know, the new web is really driven by design. You see the leading companies out there, big and small, what Steve Jobs is doing, a design-driven business in this new era of human computer interaction. And also Jack Dorsey, a great product person, and it's really around design, UX, UY. Such an important part of that, and I'm thrilled to be here at ZURB.
Back to the question. Really how we got that started, we were pretty young. We were just out of college, and we didn't really know what we were doing, but we had a pretty bright team. We actually had four founders, all out of Stanford, a couple of really great, bright engineers. Our tactic there, it's a hard market to solve, and it's a hard customer to sell to.
I think we kind of stumbled into it almost haphazardly rather than saying, "Okay, what's the best market where we can get in really quickly, grow customers fast, check off all these different boxes," that maybe many premeditated entrepreneurials will do. In this case, I think we haphazardly came across the opportunity or kind of stumbled back into it, because somebody asked us to help build connectivity for hotels.
We approached one of the GMs for a set of Hiltons, and we were lucky to wire up one of the Hiltons here in the South Bay. That was key. What we did was we basically bum rushed this great general manager who was forward-thinking. He was here in the Valley. He knew his customers wanted Internet access. He was excited about technology and the boom that was happening in the late '90s. So we made him an advisor. He invested some, and he became our marquis customer and helped us get into a few more hotels.
I have to say, it was our Y Combinator — if you're all familiar with Y Combinator — it was kind of our Y Combinator experience before the Y Combinator. We got this thing going really fast, and we had a very quick exit to a company called LodgeNet. If you go into hotels, they're the ones that still to this day provide the movies, although that business must be just getting really disrupted by the fact that you can watch any film through streaming on Netflix or iTunes and so on. We'd been working on this slightly before, but we incorporated in April and sold the business in October of 2008. It was a whirlwind.
Dmitry: So, it was what, $10 million? $9.5 million?
Kevin: What happened after a run-up in stock? It was an all-stock deal, it was roughly around $10 million.
Dmitry: So nothing to retire on, but again, something to get comfortable with, start investing as well. And that's where you turn the road a little bit. You kind of started investing, and Peter Thiel was a friend of yours from school, from Stanford?
Kevin: Peter and I were both involved in student government. He was more on the libertarian-conservation side. I was more on the liberal side, but we actually got along. What's interesting is a lot of the PayPal mafia are these conservatives, and I think I was maybe their token liberal friend or something. But we reconnected.
Peter originally went to law school, went to a law firm, went into the derivatives trading business, and came out to start Thiel Capital, which was a hedge fund, and got a tiny little office on Sand Hill Road, because he heard if you have that Sand Hill Road office, that's a very important thing. He started doing hedge fund investing and, meanwhile, very observant, very big brain, saw what was happening in the late '90s and started investing in tech companies. The rest is history.
Max Levchin came to him and said, "I want to start this company." It was originally a mobile security company, but they soon discovered that mobile wasn't at that means of maturity, and that speaks to that first lesson of being very agile and switching direction. They actually switched direction quite a number of times. They did it in literally a six or eight month period, and by the fall of '99 had launched, it was actually October of '99, launched PayPal, what it was today.
By three months later, I think I was user number 22 or 23, and a few months later, they had a million consumers, which at the time was quite a few. Then it just rocketed from there. But Peter stepped out of that investing side and into a full-time operating role running PayPal.
I had the chance to invest and just knew Peter as this big brain and people I wanted to be around. So I think that's really the first lesson is to find those really bright people. Finding mentors, finding those with trajectory, you don't always have to find the person who's accomplished 30 years of work. You can a lot of times see those sparks of brilliance of people on that very steep trajectory. So staying close to that PayPal mafia has been a lot of what I've built my career on basically.
Dmitry: So you started investing. PayPal was one of your investments, right?
Kevin: Yes.
Dmitry: Peter came to you. How did you guys know PayPal was a good investment? Were you kind of guided by Peter's thinking?
Kevin: In hindsight, it was really the time. Because the original idea, I invested in FieldLink, which was PayPal's original name, and then it was changed to Confinity, and then it was changed to PayPal. FieldLink was actually smart tokens and security for mobile devices. And then they moved to Confinity and this new model, which was transferring money.
By then the leading semi-smartphone at the time, which was the Palm Pilot, and transferring money through the IR port. They realized that you had a constraint of geography, that people had to be present, and you had to have density of users to be able to do this. And they had based the accounts on email address, which to this day, is still a lot of the brilliance of PayPal. You don't need this complicated account number. You have a simple email address.
Then they started calling it PayPal, and they saw people transferring money between accounts and moved to the web. When they moved to the web, they didn't know where they were going to actually find their traction, and the customers found them. What happened is that eBay was that perfect marketplace, that at the time was booming, but people were 100% exchanging checks or sending checks through the mail.
Peter had always talked about one of his other theses, that PayPal and financial service business in general, there's a time sensitivity where people will pay a premium for moving money really fast. That was really the basis of PayPal.
PayPal logos started showing up in eBay auctions, and one small crowd at PayPal was saying, "They can't do that. They can't take our logo and start using this for auctions. It wasn't meant for that."
Luckily, the bright minds over there prevailed by noticing that this is a great audience, a perfect audience to adopt a product, where you have two unknown parties, a merchant that wants to collect money and a buyer that can pay securely. The rest is history there.
Dmitry: So that was 2001. Around 2001, you had started Xoom, a new company there. I can see your thinking right at that moment. You're invested into PayPal, the PayPal business model. Xoom is a money transfer company, right? It's like Western Union, but it's better, faster, those ideas?
Kevin: Yeah. Really, what we started towards the end of 2001, Alan Braverman and I, my former business partner, was we looked at trends. Mike Moritz, once I had gotten to meet with him, from Sequoia Capital, and he had once said look for industries that build industries upon industries. Way back then, Netscape was something. That browser had opened the door to such a massive industry. Cisco and the router, now we see with Facebook and the echo system that it's created.
In essence, we saw PayPal was exploding, and, at that time, we saw two things happening. We saw Google really taking off, and we were saying, should we do something in advertising or something or in payments with PayPal? We had encouraged David Sacks, the head of product, to really focus on building a payments API. He hired somebody I had introduced to him, Dave McClure, to head up the developers program. Probably a lot of you know Dave McClure.
So the idea there was that PayPal was starting to build a platform, and that's very important, as we can see Microsoft in the '90 built a platform and attracted that weight of developers that just sucked the air out of all the other competitors over time.
Today, we see Apple and the iPhone, Android device, or we see Facebook and its echo system. We looked at PayPal as a payments platform, and it was primarily focused around auctions, and we were saying, what else could we build on top of PayPal? We built actually six or seven different payment apps.
Actually, the early beginnings of Eventbrite came from those different kind of brainstorms and hacks and things of that nature, but Xoom came out of that as well.
Dmitry: You like Netflix a lot, right? I remember you talking about Netflix at the time, and you kind of trying model or look up to Netflix at the moment.
Kevin: Yeah. Netflix is a great company. It's an extremely well-run company. Reed Hastings is just a great company operator, great vision. Netflix was very quantitative. That was another lesson that we see a lot today, is really applying metrics, quantitative principles to business. You look at the business almost as ... I'd done a little research, and I'd done a stint of research in a research lab, and it is like running experiments and testing and trying lots of different things and seeing what works.
Netflix had a wonderful business, but it also was very disciplined in how they spent in different channels and acquired customers and found that they could acquire customers for an average of $45, and that through different mechanisms of delighting the customer, building a great product, reduced churn to sub-5%.
What that meant is that they could acquire a customer for $45, and on average, that customer would be worth $300 or so over the lifetime. That's a fantastic business. Now that sounds very boring if you just look at the numbers, but you can break it down to a numbers side, but you still have to stay grounded. And what the folks here at ZURB are doing is trying to build these delightful, creative... what we're trying to do at Eventbrite is build a really delightful, great product experience.
Dmitry: Are you a metrics guy? Did you use metrics early on at Xoom to drive your decision making?
Kevin: Yeah. So we call Xoom... and to tell you a little bit about Xoom. Xoom competes with Western Union. We help people send money to their families overseas. We call it an online/offline service. You basically send money online, and we partner with different banks or retailers in foreign companies and disburse cash or direct to bank account or so on. That's actually, we call it a quasi-subscription model, because although you don't subscribe, and money is sent automatically every money or you get billed every month, it's very coordinated with paydays.
So on the 1st and 15th, when somebody gets their paycheck, as part of their duty to family, they send their money very religiously, very methodically back there. And we can actually map this. We can map the cohorts and the repetition rate and the churn rate based on that, even though you didn't have as nice of a model as a Netflix, which they know every month they collect their $15, and they know exactly when somebody's churn.
So we call Xoom and Eventbrite kind of extreme subscription services, because both have a lot of repetitive qualities. In the case of Eventbrite, merchants or sellers or organizers are holding events, sometimes daily, sometimes monthly, weekly, and sometimes yearly. Understanding how each of those cohorts or each of those groups behaves and when they churn is very important, and the same with Xoom.
Dmitry: I want to leave some time for Eventbrite, so we'll just kind of move on to Eventbrite. There's tons of stuff in Xoom I want to talk to, but Eventbrite. How did the idea come about, and how did you know the market was there, that there was an exciting market there?
Kevin: Well, it came about ... I was just talking to some folks earlier. A lot of these ideas have been recycled. Steve Bennett's here. He remembers Activa and a lot of the companies from the '90s. There's literally a slew of Eventbrite-like companies that raised a lot of capital and didn't make it for various reasons.
The notion of Eventbrite is that we're democratizing ticketing, that you can have this SAS cloud-based service that just makes it super easy for anyone to publish an event and start selling. It's a classic disrupt from below model that we made it as easy to start selling tickets or organize events, as it is a published blog. When that happens, we just saw this blossoming of all this great content and things happening.
What's happened now is that we like to look at ourselves. I talk a lot about being a historian of technology. We look at a lot of what's happened in the past. We look at models, admire what Marc Benioff did, starting off in the SMB market with Salesforce.com. The classic example of Tom Sieble being very dismissive. Tom Siebel is selling Siebel Software to the Fortune 1,000, and it cost millions of dollars, and expensive to ingrate, and you had these long contracts.
He looked at Salesforce.com and dismissed it as this toy. He used to call it a toy. Meanwhile, they gained this momentum, they gained this massive scale, moved up the stack and, now, primarily displaced Sieble in so many accounts and have grown into the mainstream.
That's the notion here with Eventbrite. We're disrupting, we're entering the market, we're moving up. The the interesting thing about our market though is that still by far, our business and our gross profits and so on are driven by the so-called long tail. It's a great, great business. It transcends borders. We do about 20% of our business outside the US.
We don't want to forget those roots. As we grow in scale, the business, that's a big challenge of the business. You don't want to all of a sudden start saying we're going to serve the giants, the AT&T ballpark, because the requirements are very complex and different, and it would come at the cost of our core business, because we just don't have the resources to dedicate to both. So, a very important point of expansion and growth at any stage of the company is just don't lose sight of your core business.
Dmitry: How did you actually know that the market was there? The idea sounded great, right? But then what kind of research, what did you do to kind of prove that the market was there?
Kevin: It was really challenging with Eventbrite versus Xoom. So Xoom is a classic business where it has a clear TAM. If you don't know the TLAs, three-letter acronyms, TAM stands for total addressable market. That's something that an investor likes. Sequoia loves and has to see . . . Sequoia is more of a TAM investor. They want to see that the company can get to a billion in revenues or has that capability to do that.
In the space of international money remittance, you have central banks around the world recording all the money being sent through remittances. Actually, the numbers are staggering. It outstrips all foreign aid and is sometimes larger than the GDP of these countries or so on. The remittance flows are in the few hundreds of billions. Then you take whatever your revenue take rate is. Western Union actually takes between 12%, and they still only have 20% of the market.
What I'm painting here is that you have a very clear market size, say 350 billion in gross remittances. You have a certain take rate, X%, and that's your revenue number. Of course, you have to slim it down, because not everyone's online at this point and so on. But we could very clearly demonstrate the market size, the TAM in that case.
In the case of long-tail events, it's very difficult. It's easy to size up the traditional ticketing market, but the long tailed market was more of a leap of faith. It was just that feeling that this is something big, and it's more the business that went more on gut instinct.
We are now seeing as we move up the stream, we're becoming more and more confident in that. But, I think, for lack of... if you ever go into a business where you're not sure the market size, I think that's where it also is very helpful to bootstrap. So we weren't sure how big the market would be. We bootstrapped the company, because we didn't want to end up with a venture overhang found that we were in a niche market.
So we actually spent our first two years just putting a little bit of our own money in, taking no salaries, and bootstrapping the business. It also has that great by-product of being very focused on profit and growth and the customer and everything else. So we got the business profitable, and we could then get that sense that there's a massive opportunity here.
Dmitry: You launched Eventbrite very bare bones, right? The very first version of it came out. Why not put more features into it? More sparks, more whistles. What were you thinking?
Kevin: Great question. I'm a big fan of launching early and fast, and there are different schools of thought there. But again, in that the world is the Petri dish, the Internet is the Petri dish. To get something live, to get just the base functionality out there and get people using it and understand how they're using it and what works and what doesn't work, I'm a huge fan of. I do some investing with one of the cofounders of YouTube, Jawed Karim, and so I've had to hear the founding of YouTube story maybe 500 times. But I love it. I get goose bumps every time I hear it.
They actually launched as a dating site. They were nerds, so they launched on February 14th, because they had no dates. They figured that people would post video profiles and that you'd find those profiles. It wasn't really working. They were seeding Craigslist. They were going to pay women to post video profiles and tried all these different things.
Then all of a sudden, they saw somebody had posted a video of a plane taking off right overhead. They were sitting on the hood of a car, and this plane takes off. All of a sudden, there was this rush of traffic to see that video, and something clicked.,/p>
I think they're that classic case of iteration where they very quickly start saying, this is a post anything video site, and on a daily basis would make modification based on user behavior. By the summer of 2005, they had about 1,000 registered users, and, by the fall, it was exponentially larger and Sequoia did the round, and the rest is history.
So, I think that if you would have sat on building a video dating site for a long time until you felt it was right and then launched it, I know you would have missed the whole revolutionary market. And I've seen it happen. I've had friends who are great engineers and have great vision and literally launch when they're down to their last dollar of funding with that expectations that it's going to be a big boom. And really when you launch, it's really the start. The clock really only then starts ticking. So getting things live and understanding having that runway to work there is critically important.
Dmitry: You launched it. It became very popular. Very recently, I hear people talking about the head-on competition with Ticketmaster. Bloggers all over the place. Eventbrite is the future. Ticketmaster is going to go down. They have too many fees. Talk about, are you trying to take on Ticketmaster? Are you trying to compete with them? What's the thinking there?
Kevin: All in due time. We don't so a lot of the core business of Ticketmaster, which is reserved seating. We will be doing that. We will be rolling it out, but, again, we want to roll it out at the pace that we feel comfortable. We've got a lifelong of work just capturing the long tail. We've seen the business translate very well internationally, as I mentioned earlier, we do about 20% of our business.
Actually, our latest funder, Tiger Global, has a very international perspective and has been helping us look at all the exciting markets. Europe, Latin America, Asian, and so on. You follow the path of least resistance, and right now, that's taking us internationally. It's taking us into many verticals. It's taking us into certain music and entertainment verticals where Ticketmaster competes. We're an ideal solution for festivals.
In fact, we did one leg of the Warped Tour. We did the Ventura stop last weekend, and we sold 62% more tickets than Ticketmaster did. I was kind of biting my nails, like, we've got to beat Ticketmaster on this. They're the beam. They've got the distribution and the voice and the brand and everything else.
Then seeing that through social media distribution, through great easy to use service, the delightful service, through great customer service, through lower fees, we really nailed it on that one. So we're creeping up there, I would say. It's not going to be an overnight overthrow. Netflix, it was just a year or two ago that Blockbuster filed for bankruptcy. It takes time, and it will take a long time to take a Ticketmaster down.
Unfortunately also, we love being the David and taking on the Goliath. It's part of the Silicon Valley way. Part of that is that sometimes the Goliath undoes themselves. They merge with Ticketmaster. They've lost a lot of their talent. They just haven't learned the lessons. They don't have consumer Internet people running those businesses.
So it makes our job a little easier. But we feel a great sense of responsibility, and we're doing it the Silicon Valley way. We want to build great product and technology and win on that means, not by background deals or relationships or anything else.
Dmitry: Well, I want to leave some time for question folks have here. We have a question right there in the back there. You and then you.
Audience Question: You said right now you're focusing on the long tail. At what stage do you start to lock in some enterprise customers [inaudible @29:07]?
Kevin: Great question. It's incremental. You need to take some risks and stretch yourself. We certainly have. I don't think there's any steadfast rule, but you just know when ... you always have to extend yourself, and then you have to see when you've gone too far. I think a few times we've gone too far, and we've had to rein back, because what happens is the product engineering has a road map that everyone's agreed upon and is working on, and you get waved in front of you these big sexy clients. Like, we're going to do such and such, an artist. What that ends up doing is, as soon as you find yourself having to do custom work or really bend from your core business, I would say that's the clearest litmus test to be careful.
I'm very anti that, and we say no to more customers than you would imagine. You don't want to take on business you can't handle. You could do it, you could get away with it 20 years ago. That's the Larry Ellison Oracle model. He would sell something, tie him up in a multimillion dollar a year contract and start working on something and realize you're stuck with them.
You're tied in, and you have no other options, and you've already invested millions of dollars. You can't do that today. Customers can switch right away. So you don't want to over-promise, and you don't want to distract your engineering teams.
Dmitry: Gentleman right here.
Audience Question: When I think of Ticketmaster, of course I think of Microsoft, because Paul Allen founded Ticketmaster. My question is, do you know how they're going to come after you? I'm not ruling out a bomb in your car. [inaudible @31:10]. There are other dirty tricks they can try.
Kevin: It was actually, Fred Rosen was the founder of Ticketmaster, and Paul Allen bought and sold Ticketmaster I think to IAC, to Barry Diller. They were in a fortunate position of ... they were under scrutiny from the Justice Department. They're in kind of their sunset period. They did a disastrous merger. They were doing a $1.3 billion in revenue and $300 million or $400 million in EBITDA, and they merged with LiveNation, which is a money losing business saddled with debt. I think it's a very different case. There are a lot of challenges.
The LiveNation business is a music promotion business and has artists under management, and then they have the ticketing business. So, you have these interesting dynamics in a lot of cases. Like Madonna or whoever, has this almost obligation to play these Ticketmaster venues.
So, it's tough competition, and for lack of that, you again go the path of least resistance and continue this great expansion in long tail, continue in other verticals. But, in time, we're seeing we show results like 60% increase in ticket sales at Warped Tour, and the best solution will, I believe, prevail in the long run.
Dmitry:The guy in the red shirt there.
Audience Question: How did you get your first few customers for Eventbrite and get the word out after that?
Kevin: We actually went to friends who we knew held events and had them try it out. Then, we just very carefully ... Google Analytics or whatever log analysis tool you use in looking at those customer types becomes heavily critical. So first, you get your alpha and beta customers signed up, and really watch what they do. Then you see where people start finding you organically. That's a very important lesson.
In the acquisition side, a lot of products fail, because they never figure out the acquisition side. Our events business is a tough one for acquisition. But what happened is, again, looking at other companies and really studying those companies. The reason I invest in and get involved in other companies, I love to help other entrepreneurs, but I also learn so much in different practices. Jeremy Stoppelman from Yelp, he's an advisor investor in Eventbrite and a friend of mine.
We loved what they did early on in terms of gaining SEO, indexing all the countries' businesses and driving a lot of traffic through that, and over time incrementally building up the brand. That's how we had seen our business grow a strong SEO, as we have all this unique content being published, event content that people want to find and see.
But then our PayPal moment of seeing thing happening on eBay, PayPal taking hold on eBay, was we started to see traffic come from Facebook a couple years ago and said, "Wow, that's interesting." What it was, was that people naturally want to go to events with their friends or to conferences with their colleagues and share those.
So we said, "Let's figure out how to enhance this," and built a lot of tools and means to make it easier to share events. That in turn drove more traffic, and now Facebook is the number one source of traffic to our site. So again, that observational side is very important.
Dmitry: More questions?
Audience Question: [inaudible @35:17] there's an opportunity there [inaudible @35:23]
Kevin: You're setting me up right now. Event discovery is so important, and we don't do a great job. We have so much great content in our site, and I'll be the first to say that our discovery is broken. One of the benefits of capital and then also the momentum of having all this great inventory is now we need to share that with the world. That's one of the most comments I get is, I wish I had known about this Eventbrite event.
So we're working very hard on how we now, to the tens of millions of people that have used Eventbrite, that have attended events on Eventbrite, how do you begin to share through algorithmic recommendations, in the case of Netflix, or friend recommendations, or the traditional ways: by location, topic, whatever. We really need to build up that consumer side.
I would say that we started very heavily focused toward the organizer, the merchant versus the attendee. We have a lot of makeup to do on that side. We have a lot of work to do on that effort, but we think that's a very exciting upside opportunity and something that our consumers very much want to do is discover events.
Audience Question: [inaudible @36:46]?
Kevin: We think they've done some interesting things. I like the concept of it. Is it Mark Hendrickson? He's done a lot of interesting things. I think it's hard to get scale with a business like Plancast.
Audience Question: [inaudible @37:10]?
Kevin: No. In fact, if you go into "My Tickets" right now if you have an Eventbrite account, we've kind of buried our algorithmic and our friend recommendation pieces right now. We've just been really working on refining it before we open it up to the world, but you'll see friend recommendations more front and center coming soon.
Dmitry: One more question right back there.
Audience Question: Now that we're starting to see [inaudible @37:43], do you have a thought on [inaudible @37:48] Eventbrite, or [inaudible @37:50]?
Kevin: On the IPO front, it is a very unique time again in Silicon Valley like we haven't seen before. There are a lot of businesses that were built in the '90s and the last decades that are ready and should go out. My personal opinion is that I think companies . . . I'm very contrarian on this.
I actually feel companies should be going public earlier than later. I think that a lot of the regulation has made it tougher, but I also think there's a stubbornness or a status quo mindset in the Valley that says that you should wait a long time to go public because you have more autonomy.
But I grew up at a time seeing Microsoft or Yahoo or Cisco going public and quarter after quarter being very accountable, being very transparent, and that really helped drive their businesses to great heights. Certainly all those businesses have been now disrupted by other means, but I think it's very dangerous to stay private too long, because bad habits can fester in the absence of shining a light in there.
We could potentially file as early as late next year. We'll see. We have to continue to perform to very lofty expectations to be able to do that. But we think the decision there is we want to build a company that's around in 30 years. Just like, for some reason, Ticketmaster's been around 30 years, we want to be around 30 years from now, and we think being a public company is a natural part of that.
Dmitry: All right. Well we're out of time. I'd like to thank Kevin for such an awesome discussion.
