My favorite startup from the third session at TC50 was SeatGeek. Overall SeatGeek appears to have a strong value proposition – “buy event tickets at the right time and save substantially over the peak price.” It’s very similar to farecast, but for event tickets (sports, concerts, etc.). The product, market and business all seem to work/fit since SeatGeek is already profitable. The big question for a startup that reaches profitability and overcomes these big challenges is: Can it scale?
Based on their stated metrics, net proceeds from the average transaction to them is around $50 (10% of $500). Once they’ve acquired a user, lifetime value could be substantial (if we assume 10 transactions over their lifetime, lifetime value would be pushing $500). Within that allowable acquisition cost, there should be many scalable marketing opportunities.
I may have missed it, but I didn’t hear them address the specific way they would market the business. My assumption is that they would market primarily through search (both SEO and SEM). Given the breadth of events, there should be several keywords to test in order to find profitable, scalable customer acquisition channels. They also have strong alternative monetization ideas to further improve their allowable acquisition cost and/or profit per customer.
One potential competitor is FanSnap, which is a price comparison engine on tickets across sites. I believe the primary improvement SeatGeek brings is a price predictor, since according to SeatGeek prices often drop.