SM: During the early days, who kept the Eventbrite platform alive while Alan worked for Xoom?
JH: Initially I did that just by answering customer service questions. Now that I think back that is when I began having dialogue with our customers.
SM: Who were your customers and how did they find you?
JH: They were early adopters in the technology community. They were having paid meet-ups. There were enough users for us to get some indication and guidance on what type of product we should create.
This was at the end of 2005. We took a month off and went to Bangkok where we volunteered in an orphanage. My parents do this every year. We refreshed and reset our frame of reference in Bangkok and I am glad we took advantage of that time. We came back in January of 2006 and moved into a free office space.
Through somebody at Xoom we hooked up with Renaud Visage who is our CTO and one of the co-founders. He had just come out of Zing and was on his way back to France. We asked him if he wanted to work on this idea with us and we just hit it off. Kevin and I had never been together for more than two days and suddenly we were living together and working together all day in a conference room and Renaud was on his way back to France, so what better time to start a company together!
Despite the craziness, we just focused on building a great product. Kevin and I put in $250K in seed funding. It was the three of us working on the product for two years. The service was live and we iterated on the product by talking to our customers.
SM: How were you making money?
JH: We were making money by charging a fee on top of the paid ticket price. In the beginning it was completely free. It lasted for about 6 months before we introduced a freemium model. If I had to tell you what one of our biggest failures was today it would be how we offered a freemium model. We wanted to give everybody all the features. We kept putting features in both buckets.
SM: Could you do freemium on volume?
JH: Yes, and that has always been our goal. It was just a curt conversion and we did not understand that until we went to a completely paid service. We experienced very little churn but our event organizer conversions skyrocketed. They no longer had to sit there and make decisions between a base service or if they should choose the paid service. We had so many great features in the basic service that event organizers kept asking themselves what the catch was. That is our revenue model and it has remained since.
SM: What is your revenue structure? Is it a percentage structure?
JH: We charge 2.5% plus 99 cents. It is an industry standard, we just priced ourselves on the lower end. As a startup it is important to get your product out there and get people using it. Initially we based it on the ticket price, but if event organizers entered the ticket prices as $0 then the service could be used for free. We did not think much of that until it because a significant value to us. Users were able to use Eventbrite and become intimate with how it worked, so it essentially became an open source model for us.