Nine Startup Scaling Secrets from Eventbrite

On anyone’s list of the fastest-growing and most interesting social-commerce startups in San Francisco/Silicon Valley, Eventbrite has to rank near the top. Since collecting $6.5 million in Series C financing from Sequoia Capital in late 2009, followed rapidly by another $20 million infusion from DAG, Tenaya, and Sequoia less than a year later, the online ticketing company has more than sextupled in size—from 15 employees to 100. It now expects to grow to 200 people this year. It handled $100 million in gross ticket sales in 2009 and more than twice that in 2010.

Eventbrite has succeeded by making itself both ubiquitous and indispensable. Judging from my own experience, there’s hardly an organization in Silicon Valley, Boston, or other U.S. tech hubs that doesn’t use the company’s Web-based event registration system to track and monetize attendance at conferences, seminars, or cocktail parties. (If you’ve ever been to an Xconomy forum, you know we’ve been using Eventbrite ourselves for years.) And while the company is still young—it will reach its fifth birthday in July 2011—it’s already hard to remember how anyone handled small-event ticketing before Eventbrite existed.

Last month I sat down with two of Eventbrite’s three co-founders, the husband-and-wife team of Kevin and Julia Hartz. (Kevin is CEO, Julia is president, and the third co-founder, Renaud Visage, is chief technology officer.) I wanted to hear the backstory to Eventbrite’s founding and the Hartzes’ unusual partnership. But I was also aware of Kevin Hartz’s connections to what’s been called the “PayPal Mafia”—the group of engineers and investors who helped launch the foundational online payments company in 1998—and I wanted to know how he’d profited at Eventbrite from the lessons he learned as a Paypal investor and subsequently as CEO of Xoom, the international money transfer company he co-founded prior to Eventbrite.

I’ll get to those lessons shortly—there are nine of them altogether, some intuitive, some not so. But first, a biographical side trip to investigate how the Hartzes came to run one of SoMa’s hottest companies.

Kevin Hartz—who is a far more modest and unassuming guy than most of his dot-com-era contemporaries—emphasized to me that he was “the first generation off the farm” in his family. His mother was raised on a dairy farm, and even though Hartz himself grew up in swank Orinda, a conservative suburb on the other side of the Caldecott Tunnel from Oakland, he says he was raised with “a strong work ethic,” plus entrepreneurial drive and a need to be challenged intellectually.

After finishing his undergraduate degree in history at Stanford in 1992—and detouring to the University of Oxford for a master’s degree in the same subject—Hartz worked briefly for Silicon Graphics. In 1998, he co-founded Connect Group with a group of Stanford friends. The company provided high-speed Internet access to hotels, and was almost immediately bought by LodgeNet (NASDAQ: LNET), still one of the largest players in hospitality broadband. “That was my first taste of the entrepreneurship bug, even though we had hardly made a big impact,” Hartz says.

The LodgeNet deal left Hartz with enough money to start angel investing. One of his Stanford connections, through student government activities, was Peter Thiel, who had recently returned from the East Coast to set up a small private equity fund on Menlo Park’s Sand Hill Road. Thiel had decided to start a company with recent University of Illinois graduate Max Levchin. Over sandwiches in Palo Alto in early 1999, Hartz was invited to invest. “We went to Hobee’s one day, and … Next Page »

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Wade Roush is the producer and host of the podcast Soonish and a contributing editor at Xconomy. Follow @soonishpodcast

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