Every morning when I get to the office before I jump into work, I read. I usually make myself go through all the Techcrunchs and Wireds of this world to take a look at what’s going on from startups to investment, from business to technology.
Therefore, I often bump into these astonishing stories of startups which grew tremendously over a short period of time.
However, a few days ago, one of these stories fell into my lap. A kind of story that you read on Techcrunch, Fast Company, Forbes, or First Round Review
Yes, this is a story about a billion dollar company. A billion dollar company called Eventbrite.
I had a chat with Renaud Visage, partner at Index Ventures and co-founder and CTO of Eventbrite, the leading events platform of the world, to learn from his story and how Eventbrite grew to be a reference in the market. We talked about why in 2009 all they got from investors were no’s and how they turned it around, how Eventbrite built a strong infrastructure to handle a crazy amount of data, how is it like to be on the other side of the table now as an investor, and what he is expecting to see at the Lisbon Investment Summit this year.
Meet Renaud Visage and many other founders and investors at the Lisbon Investment Summit this June.
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In an article on the First Round Review called “What Eventbrite Did Early to Create ‘Sustainable’ Success” they write this:
“By early 2009, Eventbrite had been turned down by practically every venture capital firm in Silicon Valley. The economic downturn had taken its toll, and the Co-founders had a choice. They could give up, or they could continue to bootstrap and grind as the only three employees — like they already had for the previous two years on less than 250K.”
Since then, Eventbrite has seen explosive growth and has become a billion dollar company. Can you explain what happened and how you turned it around?
The global and macroeconomic scenario was very difficult and nobody knew until when it was going to last. So, at the time, a lot of VCs were saying no to startups. I remember that Sequoia, for example, had a presentation called “Rest in Peace, Good Times” telling startups that since it’s going to be hard to raise money you need to pay attention to your product and bootstrap as much as you can because there’s not going to be a tonne of funding out there. And that’s exactly what we encountered when we tried to raise money. I think our product already had a lot of traction and it wasn’t fundamentally different a year later when we actually got to close a round, but our metrics were definitely higher. At the end of 2009, we had several term sheets and we ended up picking Sequoia Capital for our Series A.
In the meantime, we managed to raise a bridge round thanks to our early supporters and survive the financial crisis. This was our bridge round between our seed and series A. Our goal with this was really to double-down on the product side, keeping our existing customers happy but to also invest in organic growth. Organic growth had always been what worked for us since the beginning, with SEO playing a big part in our acquisition strategy. We didn’t have much funding so we focused on efficient marketing campaigns instead. We were lucky to have a lot of user-generated content – all these events created a lot of content that nobody else had. So, we built on that and we expanded our SEO presence. In the end, we were able to turn good customers into our most fervent supporters.
I think that you have to be persistent and careful and that’s something that we’ve embedded in our DNA because we’ve had bad experiences before. I mean, in my first startup we raised 50 million dollars, we went from 30 people when I joined to 120 and back to 10 in one year. So, we had a lot of interesting things that we’ve gone through in our past that told us to be careful. We knew that the VC money is not an endless flow of cash that comes whenever you need it. You have to build a strong story, have good numbers to back your story, and build a strong management team over time to attract the type of investements we were able to attract subsequently.
In my first startup we raised 50 million dollars, and we went from 30 people when I joined to 120 and back to 10 in one year.
What was the name of your previous startup and how was that experience?
It was called Zing. It was a photo sharing startup. I think we were getting to this business a bit too early. There weren’t a lot of digital cameras and the storage cost was very high at the time, we had to buy very expensive servers to store it all our content. Now, it would be much cheaper to build a similar business.
Was it just a matter of wrong timing?
Yes, but also when you fail once in a while it’s good because it shows that you can survive and for us at Eventbrite, our growth remained very strong during the financial crisis which was a nice validation of our business model.
In the beginning, you set out to be an enterprise company to help other paying companies produce events. But, you ended up having a lot of free events and from people who weren’t necessarily into the event business. Was that intentional and why have you decided to go with this approach?
When we launched we were 100% free and then we aligned with the interests of event organisers. We decided that we were going to take a commission from tickets sold, so we only make money when our customers are successful. Free events got us a lot of traction and great name recognition. To this day, our freemium model continues to be a strong acquisition mechanism for us. Also, our free organisers turned into paid organisers over time because they experiment with a model and they are not sure if it’s going to work and at some point, they professionalise side activities and can become full time organisers.
At Eventbrite, we went from 1 server to probably more than 800 servers
Now coming a little bit to the technical side, at Eventbrite, you deal with a crazy amount of data, from events to people buying and selling tickets. So, you had to lay down a strong infrastructure to support all of this, how were you able to do that, and how did you evolve over time?
Well, we went from 1 server to probably more than 800 servers today. But, I guess we built the infrastructure over time just like we built our team. We strengthened our weak positions as we evolved. However, the main problem in ticketing is in fast-selling events so, events that sell all their tickets in a few minutes or a few seconds. So, those were the ones which were much harder to solve. We were lucky to have these type of events early on so we learned that our infrastructure needed to have the capacity to host these big events one day. The first few were accidents because people decided to give our platform a try and because we were the only platform where they could do that. But, that’s when we decided to really invest on handling peak demand. So many competitors fail at this including our big name competitor companies that are much older companies fail at this once in a while. So, in terms of infrastructure, we changed to the cloud to be able to scale and have a lot more of these events than in the past. And to also have a better set up of all the software pieces, including the ticket inventory and to make sure the pre-payment system is all in place to give you time for you purchase your ticket and allow us to scale and so on. I think that this was what has been driving our infrastructure. Like, constant increase is easy to handle, you just add a few servers over time, you get a bigger database, but when we’re talking about big fast-selling events we had to make sure our software architecture could handle all of this.
In 2008, you also launched your API. Why and how did that impact your growth along the way?
So, we saw the need for an API when people started reaching out to us because they wanted to show our events on their websites or on their newsletter for example. So, the first API we launched was the event search API where you could find the cool events in your area. And then, we saw there was a lot of demand, a lot of sign ups, a lot of people using it at hackathons, and we expanded from here onward. We started getting interest from larger players like the Mailchimps and Surveymonkey’s of the world and it was very much aligned with our interests because we wanted to meet every need of the event organisers without having to build everything ourselves. Ticketing was just the bigger gap that we saw, for everything else we could set up partnerships through APIs and integrations and our solution would be a lot more powerful.
How do you look at the future for Eventbrite?
Well, hopefully very bright. We still have a lot to do. We have a lot of countries where we want to be present in. We truly want to become a global marketplace for live experiences. On the supply side, we’ve grown by having people on the ground for our major markets. We have people in the US, Australia, Brazil, Argentina, the UK, Ireland, Germany, and in the Netherlands now.
But, we also are getting better and better for bigger events and bigger venues and we want to attract those into our platform as well. We’re also creating end to end solutions for the music venue space. We acquired Queue, a company that does venue management software, and we now have an Eventbrite solution that covers all the way from planning which band is going to play in which stage inside the venue, to managing guest lists, to sending tickets, to letting people in. So, we’re trying to expand our scope beyond ticketing by providing end to end solutions in this space.
We also have been working on distributed commerce. We launched with Facebook, for example, an integration that allows people to buy their tickets directly on Facebook without ever coming to Eventbrite. So, we want to be wherever you are and if there’s an events integration that’s possible we want to build these relationships and integrations so that you don’t have to leave the applications that you’re using. Overall, where you discover the event is where you should finalise the transactions and that is really the great experience we’re creating. And, of course, that also increases conversion.
There’s a tremendous amount of talent in Europe and with the right funding and the right appetite for risk that we learn in the valley we can help a lot of companies grow as fast as they can.
And how’s your work nowadays? You have recently joined Index Ventures as a partner and you’re still working on Eventbrite. How do you manage your time?
I recently joined Index Ventures as a venture partner to help them identify the best companies to invest in. I’m very interested in sharing my experience building Eventbrite with the technology leaders of the future, and joining Index allows me to get close to very promising start-ups that I can accompany during their growth. There’s a tremendous amount of talent in Europe and with the right funding and the right appetite for risk that we learn in the valley we can help a lot of companies accelerate their growth. How would you describe yourself as an investor?
I’m talking about ambitious founders who are both humble and determined to win, and to me that’s a quality that’s not always there.
How would you describe yourself as an investor?
I would describe myself as a very passionate investor. I need to feel a strong connection with the founders and the business. I need to understand where it’s going to go and what it can become. So, I’m talking about ambitious founders who are both humble and determined to win, and to me, that’s a quality that’s not always there. A lot of people try to find ideas that will resonate with investors but it has to come from something that you’re passionate about. For us, for example, it wasn’t just events, it was technology to solve problems and we saw that the event space didn’t strong technology solutions available. So, we were passionate about bringing technology into a space that didn’t have any. And it’s this type of passion that I’m looking for, that and a global ambition, and sometimes that’s difficult to find Europe. The feeling that you have the potential of being a global competitor or not, is not determined by where you start.
But, are you looking at any specific industry or type of business?
I’m more interested in deep tech because that’s where my skills are and understanding how technology bundled together can create a great experience. So, I’m looking for ambitious use of technology to disrupt something which was done in a different way before and make it more efficient and scalable. That’s the type of business that I’m looking for.
Can you give a few examples of startups that fit into that category and in which you have invested in?
A lot of them fit but it’s too early to say if they’re going to succeed or not. But I think Algolia is a good example. I’ve been an investor in Algolia for a few years now. They’re focused on search as a service and they are the best solution out there. To me, that’s the type of company that really changes the game in a specific area and that has global potential. I’m excited about the product but also about the team they’ve managed to put in place, and they’re managing their growth really well and investing wisely.
Is it weird to be on the other side of the table as an investor now?
Not really, it feels quite natural. I was an angel investor before so it feels like a natural transition. I’ve always loved to brainstorm with entrepreneurs to think through their problems and strategy. Even if it’s an hour conversation and even if I’m not an investor I like to mentor other startups. I guess it’s always enjoyable to hear what’s going on in the world and which startups are emerging. And it helps me as a CTO as well to understand where technology is going, what people are using and what is the state of the art in different industries.
The Lisbon Investment Summit is really a great opportunity to not only get know more of Lisbon’s startup scene but to also connect with other fellow investors and finding the right partners to invest in the future.
And now that you’re coming to Lisbon for the Lisbon Investment Summit this June. What are your expectations?
I’ve been in touch with the Lisbon startup scene before and I’ve seen a few great companies coming out of there. So, it looks like it’s pretty vibrant and it looks like it’s attracting a lot of talent from all over the world. Obviously, that the quality of life there is important, and the fact that you can surf at the end of a long day is amazing. Lisbon has now more surfers than San Francisco, I think. So, I’m very curious. It’s been 3 years since I the last time I was there and I’m excited to see the changes. The Lisbon Investment Summit is really a great opportunity to not only get know more of Lisbon’s startup scene but to also connect with other fellow investors and finding the right partners to invest in the future.
Now, I think I have only one final question for you. You say very often that when you’re not writing code, you’re taking pictures somewhere. So, what were your favorite places and favorite photos?
I think I love places that are so different from what you’re experiencing in your day to day. It’s like you’re transported into a different world. I think that Africa does that to you with all those natural parks and wonderful animals wandering around freely and you’re just there as a spectator. To me, that’s quite a unique experience. On the human side, I think that India is my favorite for being so strikingly different in terms of culture and society from what we’re used to in the west. I think that those two have impressed me the most throughout my travels. As for photos, I think it’s a bit like startups I’m always thinking about the next ones and don’t think I have one or two to pick as favorites.
Will you be bringing your camera to Lisbon?
Yeah, of course! I’ll be spending the weekend there so I hope to take some pictures there. To me, photography is a way to focus on something else. We’re very obsessed by our jobs in general, as entrepreneurs and as investors, so having a way to completely disconnect your mind entirely I think is very healthy.
Want to meet Renaud Visage in Lisbon this June? Join us for the Lisbon Investment Summit – register here.