Targeting Experience Spenders, Everfest Co-CEO Talks Festival App
People are spending more money on experiences than things nowadays. Over the last few years, it’s been one of the more popular trends to cover—and is particularly relevant now given the holiday season.
That experiential spending is at the core of Everfest, an Austin, TX, startup that aims to be the online center of festivals of every kind: music, film, television, beer, wine, food, anything. While music may be the largest subset of the festival sector, with some 32 million attendees in the U.S. annually, according to Nielsen, there’s substantial interest in every category of festival and no one is capitalizing on it, says co-founder Jay Manickam.
Founded in 2014, Everfest provides both an online site to search for festivals and a mobile app for attendees, who are seeking to navigate the events they attend. With some 7,000 festivals already listed on its site, and another 100,000 pending, Everfest sees money to be made from advertising, sponsorships, and deal-based offerings as it acquires users—a model that has worked well for a multitude of online companies.
Manickam has the experience for it, having co-founded Austin shipping marketplace uShip in 2003. Since, uShip has raised $28 million in venture capital, including $18 million in 2012 from Kleiner Perkins Caufield & Byers, helped facilitate $500 million in transactions, and been the focus of a reality TV show.
Manickam, who is co-CEO along with co-founder Paul Cross, spoke with Xconomy last week about his work at Everfest, and how he has applied his experience at uShip toward building a new business. The conversation has been edited for content and clarity.
Xconomy: What’s your interest in festivals and what problem are you trying to solve?
Jay Manickam: At the highest level, Everfest wants to be a place that connects festivals themselves or the people that put on festivals, the people who go to festivals, and anyone else in the festival ecosystem, whether that’s businesses, sponsors, brands, advertisers. There’s a massive change in the quantity of festivals, as well as the types of festivals being offered and the frequency. I feel it’s a systemic change, not a fad, in how we view entertainment, and how we use our time.
X: So there’s interest. But where does it translate into a business?
JM: What hasn’t really emerged is an authoritative community around festivals, offline or online. There is no centralized place where everyone can go for information. That made us think there seems to be a play here to become kind of canonical in the space. IMDB has done it for movies. In some ways, OpenTable and Yelp have done it for restaurants. We created a Yelp-type platform for festivals.
X: How many festivals have you added?
JM: We’ve got probably 7,000 on the site right now. People add more every day. We have a backlog of probably another 100,000 festivals with partial information. When you do the math, we think there’s probably about a half-million festivals around the world, across different geographies.
X: What are you providing for those festivals or festival goers?
JM: There is utility everyone needs at a festival: You need to know where you’re going, what it is you’re going to. A map, lineup, and schedule. We saw an interesting hole there around festival apps. It’s still quite expensive to build native apps. Lollapalooza or Coachella have some sophisticated or nice apps, but then the quality drops very quickly off a cliff as you scale down to smaller festivals. We decided to build one app called the Everfest app.
X: What does it do?
JM: We’re bringing them a state-of-the art app that they probably couldn’t afford or otherwise shouldn’t pay for. Probably 80 to 90 percent of the market falls in that category of not having the budget or expertise to spend $10,000 to $50,000 on native apps. We can very quickly, through our platform, upload a map, a schedule, a lineup. People can create different schedules, and have other features, such as a social feed for pictures, or a way to communicate for festival organizers—to say something like there’s a lineup change or there’s a tornado coming and you need to leave.
X: How much do you charge them for it?
JM: Right now, our value proposition is we’ll give you all this for free. We don’t ask for any money. What we do ask for is to be positioned as a partner of yours. And we own the customers that come out of it. We are promoted as the official app. When people download the app and use it, those customers are Everfest customers. For us, it’s a way of acquiring users at virtually zero variable cost.
X: How many festivals are signed up as partners?
JM: We’ve been signing up festivals for the second half of this year and have 100 or so that have committed, everything from music festivals to comedy festivals, food, wine, and beer, arts and crafts. If you add up those 100, it’s about 3 million attendees.
X: What do you get form those users?
JM: When we get the users, we want to know where you’re going, what festivals you like, who you interact with at festivals. Understanding users and how they go to festivals over time across geographies, that’s going to create an interesting information loop. Now we can recommend better festivals to you because we know you went to this festival or your friends went to another festival and you’re likely to go. None of this information really exists right now. The apps are standalone, they’re not sharing information across apps. Festivals aren’t sharing information with competitor festivals.
X: Once you get those users, you’re able to sell advertising both in app and online?
JM: We don’t have advertisers in there yet, but we do have interest. It will be both on the website and the app. Brands you’d expect would advertise, like beer or large national retail brands or technology brands. Festivals themselves might want to advertise to sell additional tickets. Vendors who are servicing the festivals, like T-Shirts, tents, or a variety of different gear you might use for festivals. Organizations such as tourist development councils, a chamber of commerce, or cities and counties who want to promote their location as a destination. Now we’re basically in the process of prioritizing which of those to really go after and what are the best mechanisms for each. That’s what 2016 will be about.
X: Are there other ways you might make money, like offering deals on hotels or flights?
JM: Right now, you can look at any festival on our site, and on the page you’ll see all the Airbnbs and hotels near the festival. We just started it this month. We officially have some bookings and are no longer revenue-free. Down the road, we want to do full integration between air accommodations and ticketing, so we can offer full packages that are at a discount compared to the individual prices. That’s going to require a few other additional integrations, but we see that is something that is going to happen in 2016 as well. We can become a one-stop shop. You see on our site a wine festival in Seattle or a film festival in Boston, and boom, you see an all-in price on the page.
X: Do you have any advisors with experience in that?
JM: Yes, one of our close advisors is a former GM of Expedia, Sunil Bhatt, who has helped us a lot in that area. We are selling both hotel and Airbnb right now, and in the future we will look to add flights, cars, and tickets, which eventually can be bought as part of a “all-in” package.
X: Are you still operating on the $1.5 million you received from ATX Seed Ventures in April?
JM: We’re close to closing out on a $2 million round, which we’ll be doing shortly. Sometime in the second half of 2016 will be when we’ll be looking at raising an institutional round.
X: How involved are you with uShip and what’s the most interesting thing happening there?
JM: I’m an advisor and a fairly active one. I’m not involved in the day-to-day and not officially on the board. I’m still actively watching and am still a large shareholder. They’ve had a great year. They’re starting to really go after the enterprise space there. They’ll be announcing some large partnerships soon, though I don’t think it’s public yet. It’s gone from a startup as a consumer play, and while consumers are still very important, the future growth of uShip is going to be in the SMB and enterprise space.
X: How hard was moving on?
JM: Some ways were easy and some were really difficult. It was easy in the sense that I wanted to try out a new industry, and get back to early stage. It was extremely interesting and I learned a lot as far as personally going from being super hands to being a manager of human capital when I left. I did well at that, but I think I’m better suited to earlier stage.
X: Even though it was founded in 2003, it seems like it took until “Shipping Wars” was broadcast in 2012 on A&E for uShip to really take off.
JM: Yes, one big inflection point was absolutely the TV show, which allowed us to get to a lot of consumers. We never would have been able to afford that type of exposure if it wasn’t for that. That was kind of one of those right place, right time type of things. We knew some TV guys, back in the day. They shared office space with us when their company and ours was just starting. We talked with them and they were making some other TV show. We joked about how insane some of the things that get shipped on the site are, and how the drivers are characters themselves and have larger than life personalities. Those two things are I guess music to any reality TV show producers ears. Crazy personalities and wacky images? Sounds like a TV show. Again, it’s better to be lucky than good.
X: It seems like you’re on track to get a faster start to Everfest, though.
JM: uShip was a pure utility, right? Except for the TV show, which was the only thing that got people interested who didn’t have the need to ship. Otherwise, we would gain people at the point of need. Yes, we can get you at the point of where you’re looking for a festival. But there are lots of other ways we can reach out to you and make you interested in Everfest. Regardless of where you are, as far as going to a festival. The audience is essentially all consumers of adult age. Typically people ship something large every couple years.
X: What are the numbers on how many consumers you can actually target with Everfest?
JM: One out of three people every year will go to an arts or cultural based festival in the U.S. That’s 100 million people a year. Just about every adult will go to at least one festival a year. Festivals span every possible form of culture. If you’re not interested in music, movies, film, or books or food, you kind of don’t have a pulse.