TC50 startup SeatGeek raises money | Hacker News Reader

TC50 startup SeatGeek raises money

techcrunch.com

12 pointsEverest16 comments

These guys got rocked at TC50, deer-in-headlights style. Paul and Marc Andreessen's questions were pretty devastating, given the team should have had answers at the drop of a hat.

Paul asked why they were helping other people buy tickets rather than using their secret price prediction algorithm to arbitrage them and make all the money themselves (assuming the variance is high enough).

They didn't have a good answer to that, although it's plausible to me that the variance is smaller than the transaction costs. But it's a bit like knowing about Black-Scholes 10 years before anyone else and sitting on it.

Andreessen asked them what their TAM was, and it seemed like they didn't even know what that meant. It was pretty bad; obviously their business isn't going to capture 100% of the secondary market, because most of the money is made by the people actually selling the tickets. At most you'd only make some % of that.

In any case, it's good to see them moving forward. TC50 must have helped them refine their pitch a lot, and given the quant nature of the investors they must have seen an opportunity that wasn't totally apparent from their TC50 demo.

I can give an obvious answer to that first question. It is because there is no centralised clearing house for tickets, and in order to arbitrage them one would have to buy them from individuals which ends up being very costly. People will not send the correct tickets, they will send fake tickets, they will claim they sent the tickets when you have not received them, etc. It is not a coincidence that almost every auction site out there requires the parties to do the final exchange among themselves.

As far as TAM goes, well I do not think it is fatal if a start up does not know what that particular acronym means. A good investor would calculate that themselves anyway. One would have to be very gullible to believe the TAM estimations of the average company looking for funding (they all say everything is a 100 billion dollar market).

Yes, sure, a good answer which amounts to: transaction costs are higher than the variance. That's the answer they should have given Paul.

TAM answers the question, "In the best of all possible worlds, how much money would you make?"

As an entrepreneur you'd better have a good, if not totally accurate, answer to that question. At the very least it shows investors how well you've segmented and sized your target market.

With regards to why we don't arbitrage, I answered this in another HN comment: http://news.ycombinator.com/item?id=823327. There are a number of reasons, but one of the biggest is transaction costs.

With regards to the TAM, I totally agree that we dropped the ball when we were on stage. I guess the pressure of being under the bright lights got to us. But we do indeed know our TAM; if you happen to be interested I can send you an Excel model that calculates it.

S'all good. I assumed you had answers, because your product was clearly thought out, functional, and polished.

It was just rough to watch the video -- I actually cringed.

Heh, I still cringe too.

Just checked out an upcoming game that I'm planning on attending and wow the interface rocks! At all the other ticket places I have to look at the list of tickets, see what the section is, and then find it on the map to see if the price and location are what I'm looking for. SeatGeek completely eliminates this pain.

Thanks, appreciate it! Would love any other feedback you have.

I talked with these guys awhile back and they're very nice and have some interesting ideas. I hope they do well.

It's kind of pathetic that Arrington labels startups who demoed at TC50 as a "TC50 startup" .. Slyly attaching his name to every startup that sucked up to him enough to get onto the demo roster.

Is this that different from YC companies getting the (YC 'XX) whenever they appear on this site?

Surely investing!=demoing at.

Of course it's not the same, but in both cases the writer is using a short phrase to give context about the company.

Participating in TC50 is not as prestigious as participating in YC, but it is not trivial either. As a reader, I care about whether a company launched at TC50.

To be honest, I don't. I don't know 100% how much mentorship input assistance advice, etc TC50 give, but it seems likely that YC or any investor give far more.

The "TC50 startup" thing just seems a bit like newspapers who constantly feel the need to remind you that they broke certain stories "As previously exclusively reported in this very paper" etc.

Just because someone launched at a certain venue, doesn't mean that venue can really claim any ownership. But then it's a common enough thing - you get stars/singers/actors who are constantly labeled as 'being discovered by X' which must be pretty irritating for them.

sorry, went off on a rant there :/ just my 2c

Demoing at TC50 isn't really that prestigious. It's kind of gross actually. Last year's was bizarre, starting off with the star spangled banner being sung by attractive female founders made me feel somewhat dirty just being there. Then the companies.. Totally squicky. Hangout.net was one of the companies who couldn't stop saying "increase branding opportunities to children with product placement" over and over again. I imagined their CEO with a barbell mustache and a maniacal laugh every time he talked about putting Nike and PepsiCo logos in the game, and letting children buy those with their milk money and allowances. It actually made me want to never allow my daughter to use a computer.

To quote the Clash,

"If Adolph Hitler, flew in today.. They'd send a limousine anyways"

Seems likely an awfully minuscule thing to get worked up about.

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