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.

It’s a bit strange that I’ve picked another “kids targeted” startup from the second batch of  startups as my favorite – kids are a notoriously difficult market to acquire online.  But in the case of ToyBots, I believe they are targeting a fantastic opportunity. It is likely that connected toys will be the next generation in toys and I love their example of having grandma read a story to the grandkids through the toy. 

I believe Webkinz laid out a good marketing roadmap for this type of startup.  My kids couldn’t walk into a Justice (previously called Limited Too) without asking for another Webkinz.  I didn’t mind buying a stuffed animal, but am a little more hesitant to offer the kids my credit card for online purchases.  From a business perspective, I was intrigued when my kids ripped off the virtual currency and threw the toy into the corner – never to be played with again.

ToyBots can create a tighter link between toys and a web experience than Webkinz, but leverage the same types of marketing channels. My recommendation would be to link the licensing to the marketing opportunities.  The toy makers already have great distribution, but very few subscription opportunities.  ToyBots can improve the ongoing engagement with kids for each toy manufacturer – increasing monetization opportunities and possibly creating a direct customer acquisition opportunity for manufactures to cross promote new toys.

It’s difficult to know how much progress they’ve achieved, but announced partnerships suggest that this isn’t a half baked idea.