Julia Hartz, CEO of Eventbrite, and her husband, co-founder Kevin Hartz, share their journey from bootstrapping a startup to navigating an IPO and the challenges posed by the COVID-19 pandemic. They discuss the importance of community support and the revival of events. The couple reflects on their entrepreneurial paths, emphasizing adaptability and strategic growth. Their insights on public transparency, cybersecurity in live events, and the emotional rollercoaster of launching as a public company enrich the conversation, blending personal anecdotes with professional wisdom.
Eventbrite prioritized customer experience and stayed private longer to build a lean and high-performing company.
Timing, competition, and mishaps play a crucial role in conducting a successful IPO roadshow.
Being a public company provided Eventbrite with access to financing and support during the COVID-19 crisis.
Deep dives
Building a Strong Customer Base
Eventbrite focused on building a self-service platform that catered to a wide range of event creators, from tech bloggers to speed dating organizers. By providing a friction-free experience and excellent customer service, they attracted a diverse community of users.
Navigating Economic Turmoil
Eventbrite encountered challenges during the 2008 financial crisis but saw online ticketing as a more efficient alternative to traditional methods. They leveraged social media and organic adoption to grow their user base, defying initial skepticism from potential investors.
Staying Private Longer
With a strong focus on product development and market fit, Eventbrite opted to stay private longer before considering an IPO. They believed that private ownership allowed them to prioritize their customer experience and build a lean and high-performing company.
Going Public and IPO Process
In January 2018, Eventbrite decided to go public and embarked on a nine-month IPO process. They put a spotlight on their customers and their stories, emphasizing the unique value they brought to the market. The IPO process also provided an opportunity for the company to improve its operations and streamline its business for public scrutiny.
The Roadshow and Going Public
The podcast episode discusses the challenges and experiences of going public and conducting a roadshow. It highlights the importance of timing and competition in the market, as well as the unique mishaps and adventures that can occur during a roadshow journey. The episode also mentions the significance of having a dedicated sales force and training them for important meetings with banks. Furthermore, it shares the excitement and sense of accomplishment that comes with successfully going public and the impact it has on the company's future.
Navigating the Impact of COVID-19
The episode explores how Eventbrite, as a publicly traded company, faced the unprecedented challenges brought by the COVID-19 pandemic. It details the dramatic drop in revenue and the swift actions taken to navigate the crisis, including downsizing the company and focusing on core business areas. The hosts discuss the importance of adapting to the changing market and finding new opportunities for growth, such as serving online events during a time when in-person events were severely impacted. They emphasize the resilience and determination of the team and highlight the benefits of being a public company in accessing financing and support during difficult times.
We're joined by two very special guests, Eventbrite CEO Julia Hartz and her cofounder, spouse and Eventbrite Chairman Kevin Hartz, to tell their story of building Eventbrite together (along with their lives and family) from the PayPal diaspora to bootstrapped business, unicorn status, IPO and now starting all over again in the wake of COVID with both a tragedy and a huge new opportunity in front of them as public company.
New! We're codifying our own Playbook notes and takeaways from each episode, and posting them here in the show notes and on our website. You can read them below or at: www.acquired.fm/episodes/eventbrite
Playbook
Seeing the next technology wave before others do is rare. It provides a roadmap for what to build and invest in if you're willing to bet on that knowledge.
Kevin worked at Silicon Graphics in the mid 90's. This led him to realize that internet services like PayPal, YouTube, and many others would be possible long before others (similar to Don Valentine realizing computers would penetrate every industry from his time at Fairchild).
PayPal and its subsequent "mafia" was successful in part because of rapid experimentation. They observed what got used by customers and then doubled down.
PayPal's "core" use case on eBay started as an experiment. International money transfer (Xoom) and event ticketing (Eventbrite) also initially started as experiments on the PayPal API before the eBay acquisition — and went on to become large companies.
Julia, Kevin, and their cofounder Renaud had a prototype of Eventbrite running and serving customers even before starting the company — which gave them the confidence to do what seemed crazy on paper, but was actually "de-risked": start a company as an engaged couple, have a remote technical cofounder, bootstrap for 2 years after being turned down by VCs, etc.
When a company is experiencing explosive growth, they often need to leave other huge opportunities on the table. PayPal knew international remittances could be huge, but didn't build it internally because of the need to focus on eBay merchants.
The TAM for bringing an offline behavior offline is often WAY bigger than anything you can calculate beforehand. The range and size of what were previously niche or impossible use cases will often expand dramatically with easy-to-use online tools. This is especially true in long-tail use cases that can only be aggregated by self-serve internet-based software.
One early encouraging sign for Eventbrite was its use to host speed dating events in New York. Before Eventbrite, it was nearly impossible to organize, promote, and charge for something like that. Now, organizers could suddenly become entrepreneurs and make real money hosting events like this. Most VCs ignored or were confused by this data (~"Call us when you attack Ticketmaster."), but they missed that it unlocked a massive new market which previously operated only through word-of-mouth and cash transactions (if at all).
All three major dislocations of the 21st century — the tech bubble bursting in 2001, the financial crisis in 2008, and now COVID in 2020 — have only accelerated offline behaviors to online. COVID is unlocking a new wave of online event entrepreneurs for Eventbrite in the same way the financial crisis unlocked a wave of in-person event entrepreneurs in 2008-10.
Starting with just one niche can be incredibly powerful; often your customers will then lead you to more.
Before the speed-dating in New York (which was fully inbound), Eventbrite was used to organize tech meetups in the then-smaller tech community in SF. It was even used for the first TechCrunch Disrupt!
Too much capital (and too little accountability) can hurt a company much more than help it. Capital covers up problems, distracts focus from customers, and leads to poor resource allocation.
Kevin: "The periods where we had raised the most money privately were the hardest and most difficult for me, because we were really fighting this gravity of overspending and creating inefficiency. And it took us away from our roots as a capital-efficient, highly-effective perpetual motion machine [that we'd had as a bootstrapped company]."
Being a public company not only instills more capital allocation discipline, but can ALSO afford a degree of financial flexibility that just isn't possible as a private company.
Within weeks of COVID hitting, Eventbrite dramatically shrunk the size and scope of the company AND raised $375m in new capital from new and longterm shareholders. Both actions would have been difficult to impossible as a private company with a static valuation (and associated anti-dilution, ratchet terms, etc) that no longer reflected the reality of the current situation.
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