[Music]
hello everyone welcome back to key
studies at the biz dock well many of you
been asking about hey Tom let’s not do
another technology one let’s do
something of just a regular kind of a
transaction kind of a retail and I found
one for you and it is StubHub it’s a
great story about entrepreneurs solve
the simple problem and built a big
company and there’s a lesson just in
that simple little statement right there
so let’s take a look in 2008 we have two
stanford entrepreneurs eric bakker and
jeff blurs and they’re sitting there
saying you know there is one bummer and
two problems every time you want to buy
a ticket to something you hear about a
concert oh my goodness some band you
want to see is coming to town there’ll
be playing here at Stanford whoohoo go
to the football stadium see our favorite
band but then in the afternoon of the
first day that the tickets are on sale
all the good tickets are sold out and so
what a bummer then you have two problems
if you do want to look around you had to
deal with scalpers and you didn’t know
whether they were good guys or bad guys
you had no idea which was the first
problem and the second problem was you
had to call every single scalper in the
entire town to find out hey what seats
you have what are you asking for them do
you have the tickets in your possession
Papapa and then you had to be sure that
when you got those tickets were they
real or were you going to spend extra
money go to the event and then have the
security guys say hey man your tickets
are fate because these people are in
seats they have the real ticket so now
you’ve wasted your money and you still
don’t get to see the show well here we
have two stanford students it says wait
a minute what if there is a
clearinghouse where all the tickets
could come together so you can see in
one place that there’s tickets here here
here here and here at the stadium from
any one of whoever is selling them a
nice guy like you or a bunch of scalpers
okay that would solve one problem now
they can go to one place and see all the
tickets for sale everywhere but what
about gosh we still have the problem
they don’t trust the scalpers and it’s
like buying through the one ads you can
go through a one ad or you could go
online in the early days and maybe find
a list of people selling the tickets so
you could find a little group that then
who do I trust
and her StubHub saying wait a minute
what if we made like a fan guarantee
like we guarantee if you buy the tickets
from us guess what we’ll do well
guarantee that if you’re stopped at the
show call this phone number and somebody
will show up with tickets somewhere and
get you into the show we guarantee it
well suddenly the consumer could say WOW
well if it’s that kind of a guarantee
you know I trust that and there you have
it solving a simple problem let’s take a
look at it you like to look at what did
it take to solve the problem well they
managed to get together six hundred
thousand dollars in bootstrap money in
the year 2000 and in 1998 Cheers prior
only ten percent of tickets were sold
online and those are being sold
peer-to-peer through people through
early services like CompuServe and
America Online AOL but it was a very
small amount of people finding each
other to sell the tickets well guess
what in 2001 that tripled the 30% so
StubHub and some other competitors saw
the light too they were trying to get
out there they were also in the game but
StubHub you know was leading it and
driving it and there was others like
tickets now razer gator there’s a number
of them that showed up on the scene well
they were successful and then an o1 a
year later they raised their a round and
everybody’s been following me knows what
that means that’s the first venture
capital money from professional outside
investors so it’s called the a round a
four first they raised two million
dollars in just a couple years later
they raised the Serie C you know went
from A to C and they raised another four
million dollars and then it was six they
raised twelve point six so they only had
eighteen point six million raised and by
2005 they were 50 million dollars just
selling tickets between you and me and
they were profitable so for five years
going from here to profitable and a lot
of that last amount of capital was to
expand a growing good profitable company
but to go to the next level and to get
additional people you didn’t have enough
profits to do that so you raised more
money so you have that warchest to go do
it and
lo and behold in 2007 you know you raise
this money people know you’re profitable
and by the way you get bought and who
buys you let’s take a look at this where
was a Bay during all of this they have a
marketplace they create to buy and sell
things why didn’t they organize the
ticket purchasing because let me tell
you scalpers were using eBay and it
worked I bought tickets on eBay to for
certain things now and then and I
remember not trusting I remember is that
FedEx really going to arrive but I got
to get on the 800 number to eBay I
remember being a little iffy about it
and then hoping the tickets were real
well I never had a problem but you could
read online people did the other side of
it is where’s Ticketmaster in all this
they were being led at the time by a guy
named Jeff Rosen and Jeff Rosen said I
don’t really trust this online stuff I
don’t trust what’s going on well that
may have been good from a security
standpoint but Ticketmaster was Lord God
King they controlled everything when you
were going to stand in line to see a
concert of your favorite band that was
coming to town
it was Ticketmaster office you were
standing in line on it was Ticketmaster
running the box office at the stadium or
the places like the Forum in Los Angeles
and Madison Square Garden in New York it
was Ticketmaster running things where
you were in line there for well where
were they the answer is they whiffed
they missed what was going on they still
had a profitable you know company and
contracts with all these major places
but it was StubHub that was out there
helping you and me find each other when
there were extra tickets to be had and
to buy them from people where you could
trust it so there you have a babe eyeing
them for 310 million dollars so let’s
see they raised 18 point 6 and then a
year later they sell up for 310 you know
how many how many times what was the X
on that money thank you
that’s my producer with sixteen point
six so in other words they had an earn
out that was sixteen point six times the
money that was put in over a little five
year period there’s only one word for
that BAM that’s a great return and a
profitable company that are talking
about Twitter
balls they’re talking about sales and
profits on on tickets and helping people
get together and guess what
under eBay if you look carefully read
articles today a lot of the growth in
eBay and some people say all of the
growth I’m just going to say most of the
growth the lion’s share of the growth on
eBay is StubHub and so now you’ve got
eBay boy I’m sure glad I bought StubHub
it may have been expensive I spent three
hundred and ten million dollars to buy
something that I should have helped
organize in the first place and run it
on eBay
but I bought it but I’m glad I did
because a lot of my growth right now is
due to StubHub and guess what
so where’s Ticketmaster all this where’s
the legacy in all this I’ll tell you
where MLB in 2008 a year after this
close announces that StubHub is the
exclusive MLB retail partner I had
season tickets to the Dodgers when we
lived in Los Angeles when I had extra
ones I put them on StubHub I always had
the greatest experience and Major League
Baseball approved it to the point that I
would just enter in the number the
serial number of the ticket and I didn’t
even have to mail the tickets people
could print them out thanks to StubHub
with a barcode and go right to Dodger
Stadium and sit in my seats the day that
I didn’t need the tickets for the game
so it was so convenient to me I didn’t
even have to to FedEx or mail anything
anymore and the person on the other end
instantly got the tickets so StubHub a
deal with MLB and by the way last year I
think was the season just finished
StubHub was a partner of the
Philadelphia 76ers in basketball I don’t
know if I can use the word exclusive but
they were the main ticketing partner of
the Philadelphia 76ers NBA so now you’ve
got StubHub inside eBay being big and
acting like one of the Giants of the
past and they did all that in 17 years
they go from solving a simple problem to
being a pillar of the industry
threatening the companies that should
have done this in the first place and
when you look around you these things
like ticket now and Razer Gator they’ve
kind of they got their place but there
are nowhere near the size and scope and
success of StubHub when two Stanford
grads said let’s solve
a simple problem it’s a bummer to see a
concert sellout and I have a big problem
buying from a scalper and I haven’t even
bigger problems I got to contact every
scalper in town to find out what tickets
are available so there you have it
solving a small problem it’s not about
technology it was online and certainly
there’s technology in the online website
and everything they did but at the end
of the day they were solving a simple
human transaction I want to go the game
where can I find tickets good tickets
that are available from someone who
can’t go and that’s it so for this week
I really appreciate the suggestion we’re
going to do more with that with standard
industry solving traditional little
retail and basic problems and I love the
fact that you’re sending suggestions so
keep them coming so okay I need a pillow
let me go on StubHub see if I can find a
pillow ah a black pillow right there
four dollars in immediate delivery
thank you for watching value team it the
best channel in the internet for our
entrepreneurial content until next time
I’m Tom Merritt and I hope I let you
better than I found
you [Music]
hello everyone welcome back to key
studies at the biz dock well many of you
been asking about hey Tom let’s not do
another technology one let’s do
something of just a regular kind of a
transaction kind of a retail and I found
one for you and it is StubHub it’s a
great story about entrepreneurs solve
the simple problem and built a big
company and there’s a lesson just in
that simple little statement right there
so let’s take a look in 2008 we have two
stanford entrepreneurs eric bakker and
jeff blurs and they’re sitting there
saying you know there is one bummer and
two problems every time you want to buy
a ticket to something you hear about a
concert oh my goodness some band you
want to see is coming to town there’ll
be playing here at Stanford whoohoo go
to the football stadium see our favorite
band but then in the afternoon of the
first day that the tickets are on sale
all the good tickets are sold out and so
what a bummer then you have two problems
if you do want to look around you had to
deal with scalpers and you didn’t know
whether they were good guys or bad guys
you had no idea which was the first
problem and the second problem was you
had to call every single scalper in the
entire town to find out hey what seats
you have what are you asking for them do
you have the tickets in your possession
Papapa and then you had to be sure that
when you got those tickets were they
real or were you going to spend extra
money go to the event and then have the
security guys say hey man your tickets
are fate because these people are in
seats they have the real ticket so now
you’ve wasted your money and you still
don’t get to see the show well here we
have two stanford students it says wait
a minute what if there is a
clearinghouse where all the tickets
could come together so you can see in
one place that there’s tickets here here
here here and here at the stadium from
any one of whoever is selling them a
nice guy like you or a bunch of scalpers
okay that would solve one problem now
they can go to one place and see all the
tickets for sale everywhere but what
about gosh we still have the problem
they don’t trust the scalpers and it’s
like buying through the one ads you can
go through a one ad or you could go
online in the early days and maybe find
a list of people selling the tickets so
you could find a little group that then
who do I trust
and her StubHub saying wait a minute
what if we made like a fan guarantee
like we guarantee if you buy the tickets
from us guess what we’ll do well
guarantee that if you’re stopped at the
show call this phone number and somebody
will show up with tickets somewhere and
get you into the show we guarantee it
well suddenly the consumer could say WOW
well if it’s that kind of a guarantee
you know I trust that and there you have
it solving a simple problem let’s take a
look at it you like to look at what did
it take to solve the problem well they
managed to get together six hundred
thousand dollars in bootstrap money in
the year 2000 and in 1998 Cheers prior
only ten percent of tickets were sold
online and those are being sold
peer-to-peer through people through
early services like CompuServe and
America Online AOL but it was a very
small amount of people finding each
other to sell the tickets well guess
what in 2001 that tripled the 30% so
StubHub and some other competitors saw
the light too they were trying to get
out there they were also in the game but
StubHub you know was leading it and
driving it and there was others like
tickets now razer gator there’s a number
of them that showed up on the scene well
they were successful and then an o1 a
year later they raised their a round and
everybody’s been following me knows what
that means that’s the first venture
capital money from professional outside
investors so it’s called the a round a
four first they raised two million
dollars in just a couple years later
they raised the Serie C you know went
from A to C and they raised another four
million dollars and then it was six they
raised twelve point six so they only had
eighteen point six million raised and by
2005 they were 50 million dollars just
selling tickets between you and me and
they were profitable so for five years
going from here to profitable and a lot
of that last amount of capital was to
expand a growing good profitable company
but to go to the next level and to get
additional people you didn’t have enough
profits to do that so you raised more
money so you have that warchest to go do
it and
lo and behold in 2007 you know you raise
this money people know you’re profitable
and by the way you get bought and who
buys you let’s take a look at this where
was a Bay during all of this they have a
marketplace they create to buy and sell
things why didn’t they organize the
ticket purchasing because let me tell
you scalpers were using eBay and it
worked I bought tickets on eBay to for
certain things now and then and I
remember not trusting I remember is that
FedEx really going to arrive but I got
to get on the 800 number to eBay I
remember being a little iffy about it
and then hoping the tickets were real
well I never had a problem but you could
read online people did the other side of
it is where’s Ticketmaster in all this
they were being led at the time by a guy
named Jeff Rosen and Jeff Rosen said I
don’t really trust this online stuff I
don’t trust what’s going on well that
may have been good from a security
standpoint but Ticketmaster was Lord God
King they controlled everything when you
were going to stand in line to see a
concert of your favorite band that was
coming to town
it was Ticketmaster office you were
standing in line on it was Ticketmaster
running the box office at the stadium or
the places like the Forum in Los Angeles
and Madison Square Garden in New York it
was Ticketmaster running things where
you were in line there for well where
were they the answer is they whiffed
they missed what was going on they still
had a profitable you know company and
contracts with all these major places
but it was StubHub that was out there
helping you and me find each other when
there were extra tickets to be had and
to buy them from people where you could
trust it so there you have a babe eyeing
them for 310 million dollars so let’s
see they raised 18 point 6 and then a
year later they sell up for 310 you know
how many how many times what was the X
on that money thank you
that’s my producer with sixteen point
six so in other words they had an earn
out that was sixteen point six times the
money that was put in over a little five
year period there’s only one word for
that BAM that’s a great return and a
profitable company that are talking
about Twitter
balls they’re talking about sales and
profits on on tickets and helping people
get together and guess what
under eBay if you look carefully read
articles today a lot of the growth in
eBay and some people say all of the
growth I’m just going to say most of the
growth the lion’s share of the growth on
eBay is StubHub and so now you’ve got
eBay boy I’m sure glad I bought StubHub
it may have been expensive I spent three
hundred and ten million dollars to buy
something that I should have helped
organize in the first place and run it
on eBay
but I bought it but I’m glad I did
because a lot of my growth right now is
due to StubHub and guess what
so where’s Ticketmaster all this where’s
the legacy in all this I’ll tell you
where MLB in 2008 a year after this
close announces that StubHub is the
exclusive MLB retail partner I had
season tickets to the Dodgers when we
lived in Los Angeles when I had extra
ones I put them on StubHub I always had
the greatest experience and Major League
Baseball approved it to the point that I
would just enter in the number the
serial number of the ticket and I didn’t
even have to mail the tickets people
could print them out thanks to StubHub
with a barcode and go right to Dodger
Stadium and sit in my seats the day that
I didn’t need the tickets for the game
so it was so convenient to me I didn’t
even have to to FedEx or mail anything
anymore and the person on the other end
instantly got the tickets so StubHub a
deal with MLB and by the way last year I
think was the season just finished
StubHub was a partner of the
Philadelphia 76ers in basketball I don’t
know if I can use the word exclusive but
they were the main ticketing partner of
the Philadelphia 76ers NBA so now you’ve
got StubHub inside eBay being big and
acting like one of the Giants of the
past and they did all that in 17 years
they go from solving a simple problem to
being a pillar of the industry
threatening the companies that should
have done this in the first place and
when you look around you these things
like ticket now and Razer Gator they’ve
kind of they got their place but there
are nowhere near the size and scope and
success of StubHub when two Stanford
grads said let’s solve
a simple problem it’s a bummer to see a
concert sellout and I have a big problem
buying from a scalper and I haven’t even
bigger problems I got to contact every
scalper in town to find out what tickets
are available so there you have it
solving a small problem it’s not about
technology it was online and certainly
there’s technology in the online website
and everything they did but at the end
of the day they were solving a simple
human transaction I want to go the game
where can I find tickets good tickets
that are available from someone who
can’t go and that’s it so for this week
I really appreciate the suggestion we’re
going to do more with that with standard
industry solving traditional little
retail and basic problems and I love the
fact that you’re sending suggestions so
keep them coming so okay I need a pillow
let me go on StubHub see if I can find a
pillow ah a black pillow right there
four dollars in immediate delivery
thank you for watching value team it the
best channel in the internet for our
entrepreneurial content until next time
I’m Tom Merritt and I hope I let you
better than I found
you [Music]
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