Nine Startup Scaling Secrets from Eventbrite

1/24/11Follow @wroush

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I left committed to investing, just knowing Peter’s smarts,” Hartz says. That’s how he got in on the ground floor with FieldLink, the company that would eventually become PayPal.

Meanwhile, Hartz took a day job with Outlook Ventures, a small venture fund—”the super-angels of their time,” Hartz calls them—that had seen phenomenal success with its first fund in the late 1990s. Unfortunately, the second fund struggled. “We watched the portfolio crash and burn around us” after the dot-com crash, he says. During the “very dark economy” of 2001-2003, Hartz says, two companies stood out as bright lights: Google and PayPal. With a former SGI colleague, Alan Braverman, he started a mini-incubator/think tank called Mollyguard, with the goal of developing PayPal-like startup ideas. Xoom, which collected a Series A round from Thiel and a Series B round from Sequoia, was the first result. It’s still in business today, helping workers in the United States send money home to their families in other countries.

At Xoom, “We were very clearly going after Western Union,” whose high fees for money transfers had created an opportunity for disruptive competition, Hartz says. After leaving the startup in 2005, he noticed a similar market—event registration and ticketing—dominated by a big incumbent that charged consumers high fees. “In the case of Eventbrite, I wouldn’t say we were necessarily setting ourselves up to go after Ticketmaster, but we saw a really underserved market”—especially for events smaller than large sports games or concerts. “We like to use the analogy of Siebel and Salesforce. Siebel was serving the Fortune 500 with a very expensive, cumbersome solution, and Salesforce produced this SaaS [software-as-a-service]-based, nimble solution that could serve just one person.”

Amidst all this, Hartz was doing the long-distance dating thing with his future wife Julia, a Santa Cruz, CA, native who had studied broadcasting at Pepperdine University and had a challenging job as a creative executive at the FX Network in Los Angeles, overseeing shows like “Nip/Tuck,” “The Shield,” and “Rescue Me.” But while its shows were acclaimed, FX was struggling with basic issues like distribution, online branding, and advertising. “My whole last year was unfortunately spent on product-placement deals with companies like Anheuser-Busch and Ford,” Julia says. “The writing was on the wall.”

Julia had watched Kevin build Xoom and conceive a new ticketing startup—”he would practice his presentation to Sequoia maybe 60 times in a weekend,” she says. After the pair got engaged, Julia decided to leave FX and move to the Bay Area, and came close to accepting a job at Current TV, the San Francisco-based news network co-founded by Al Gore. But “something wasn’t feeling right,” she says. “If you want to be in TV or film, you should be in LA.” She says she’d also started to feel the allure of the velocity of startup innovation. “I was always looking for a quicker process, a way to change things in a speedier way, which was why I’d chosen TV over film,” she says. So she decided to take an unpaid post with Mollyguard, which soon renamed itself Eventbrite. “I thought, ‘Okay, this will be interesting,’” she says. “We had never been together for more than two days at a time. Suddenly we were getting married and starting Eventbrite all in the same month.”

At the time, the Hartzes and their co-founder Renaud Visage saw the ticketing market as “one of the last bastions of e-commerce where there was … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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