Acquired - Eventbrite (with Julia & Kevin Hartz)

Starting point is 00:00:00 You guys are probably getting annoyed because we should get started, huh? No, I mean, I think we have enough tape here of just breakfast sandwich conversation that that can be the episode. Good. I hope you really go there. Welcome to Season 7, Episode 2 of Acquired, the podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert. I'm David Rosenthal. And we are your hosts. Today, we come to you with the long overdue story of Eventbrite. This is, of course, a fascinating one right now, an events company during a global pandemic with

Starting point is 00:00:42 minimal human contact and nearly all in-person gatherings having been canceled. And while it's interesting to dive into how Eventbrite is problem-solving in this era, the history of the company is unique and something that we haven't really covered on Acquired, a husband-wife founding team. We're in the unique position to be joined by CEO Julia Hartz and her co-founder and husband Kevin, who was also the longtime CEO and is now chairman. Rather than the full blow-by-blow of the company, we're going to zoom in on a few key moments together with them. The 2006 founding and how deeply intertwined the company is with Kevin and Julia as a couple and as a family, 2018 when Julia

Starting point is 00:01:22 led the company through IPO, and how they are managing and streamlining the business today through the coronavirus. We will also be continuing our discussion on the LP show with Kevin on his new secret until last week project, a $200 million special purpose acquisition company or SPAC that he has launched. Yeah, we're going to go deep on this potentially revolutionary way to go public that is now hot off the presses, officially endorsed by the anti IPO crusader himself, Bill Gurley. We'll also talk with Kevin about why everyone seems to be rushing to raise these things right now, how they fit into the last decade of staying private longer, and how he

Starting point is 00:02:03 believes it's truly in the spirit of Silicon Valley to leverage old mechanisms like this to unlock new innovation. I'm pumped. As always, if you want to listen to that or any of the LP episodes, you can click the link in the show notes or go to acquired.fm.lp. Now, just one announcement from us this time before diving in. We read every single survey response, which thank you for all of your thoughtful feedback. And we learned that the number one way that all of you found out about the show was word of mouth from a friend or from a colleague. Now, this is a gift because, of course, who doesn't love organic growth, but are also partially a curse since it actually makes it hard for us to repeat.

Starting point is 00:02:45 So we have a favor to ask today to pick your favorite episode and share it with a friend or on social media to help our little experiment of seeing if we can move the needle just by asking. We've also heard that a bunch of you have started discussion groups within your company Slack with your colleagues, which was just a fun pattern to see among all the survey responses. So anyway, that's our one ask today. No Slack, podcast reviews, feedback, any of that. Just pick an episode, share it, say why you love it, and thank you. Okay, listeners, now is a great time to tell you about longtime friend of the show, ServiceNow. Yes, as you know, ServiceNow is the AI platform for business transformation, and they have some new news to share. ServiceNow. Yes, as you know, ServiceNow is the AI platform for business transformation, and they have some new news to share. ServiceNow is introducing AI agents. So only the ServiceNow

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Starting point is 00:04:05 control. Yep. With ServiceNow, AI agents proactively solve challenges from IT to HR, customer service, software development, you name it. These agents collaborate, they learn from each other, and they continuously improve, handling the busy work across your business so that your teams can actually focus on what truly matters. Ultimately, ServiceNow and Agentech AI is the way to deploy AI across every corner of your enterprise. They boost productivity for employees, enrich customer experiences, and make work better for everyone. Yep. So learn how you can put AI agents to work for your people by clicking the link in the show notes or going to servicenow.com slash AI dash agents. Well, David, I think it's time to dive in with Kevin and Julia on Eventbrite.

Starting point is 00:04:52 Indeed. And I don't think, certainly not on this show, have we ever had a company that is so tied in with the personal history of the founders, which we will get into in just a second. But before we talk about you guys, Kevin and Julia together, let's talk about your backgrounds beforehand because they were pretty different, right? Maybe Kevin, we can start with you since you're the more traditional Silicon Valley background, original PayPal mafia member. How did you end up getting into entrepreneurship in your first company with Connect Group? Well, to start out with, I do need to give a shout out to Ben and David because authentically, the Pinterest breakdown, it was an excellent podcast. If you

Starting point is 00:05:37 haven't listened to it, you need to. Having seen and been kind of on the periphery of Spectator, I had the good fortune of being a seed investor in Pinterest. It's an excellent breakdown, the best I've heard to date. So thank you on that. Thank you. It's a rare opportunity where we get to have listeners on the show. And so it's super fun to have you on. Well, I don't know if I would have joined the show had I not heard that.

Starting point is 00:06:02 And I remember working out, listening to it last summer going, wow, yes, that's correct. They got it right. They got it right. Good insight. So very well done. I'll talk a bit about my background. How far back do you want me to go? We'll be done in four hours. I think maybe most interesting is like you were part of this time at Stanford and all these people who came out of it that shaped so much of Silicon Valley. What was that moment like for you and how you and this group of people became part of Silicon Valley in the early days? So I had the good fortune of meeting Peter Thiel, also Keith Reboys. I was an undergraduate. Peter

Starting point is 00:06:42 was a graduate student at the law school. And we were involved in student politics together. And believe it or not, there was a mutual degree of respect for one another. Even though we were on different sides of the political aisle, it was a time when there was healthy discourse back and forth. And we wish that would be more of the case today. But I got to know Peter and he's just a phenomenally brilliant, non-conventional thinker. He's one of a kind. We're lucky to have him in the Valley. And after that period at Stanford, we reconnected in the late 90s. And he went to law school, was an attorney, had then traded derivatives and quickly figured out that was not for him and came out and we reconnected. He joined up with Max Lepchin, which brought in the UIUC mafia, the University of Illinois, another great diaspora of great engineers, which Mark Andreessen was part of that as well. So there's this deep interconnectedness. And you had ended up at Silicon Graphics, right? Well, I did start out at Silicon Graphics. It was a kind of Google at

Starting point is 00:07:52 its time. Most people are too young to remember it. It's embarrassing, but they made these very powerful graphics workstations that for me, it was a chance to look into the future. You had a super fast processor. You had the bandwidth on campus, on the Silicon Graphics campus, which is now the Googleplex, funny enough. So you got to see video. You got to see graphics. You got to look into what the future would be like in five to ten years. And that was a very important view of how to look ahead and think ahead that

Starting point is 00:08:26 has influenced me quite a bit. And that second component, as we talk about the fabled PayPal diaspora or PayPal mafia was just how strong that talent was. So it was Peter on the Stanford side, it was Max Levchin on that University of Illinois side, and each of them were a magnet to the talent that came on. Rulof Botha, now running the North American Venture Fund. He is a phenomenal investor. Keith Reboys, now over at Founders Fund, again with this tight relationships and that sinew that exists there. Is sinew the right word? If so, it's the first time that word's been used on the show. You know, like sinewy, like cartlager. It is Reid Hoffman, founder of LinkedIn and an extraordinary

Starting point is 00:09:16 thinker in person. It is Elon Musk. So this was a chance to say, here's a bet on people. I had the good fortune to get involved as an investor in PayPal before they launched. This was pre-merger with Elon's company? Yes. At the time that PayPal merged with X.com, it was off and running in its current mode, which is online payments. And this first integration, and it was an informal integration with eBay, where it was their first vertical. So Peter and the team were working on mobile security.

Starting point is 00:09:54 They were back at the time when it was the Palm Pilot. Yeah, infrared money transfer. That's correct. And what they found is that infrared money transfer had to be done physically. And they found they were very observant. And I think that's a thing to think about as a founder is that you want to try on email. They were then figuring out that there were ways for merchants to transfer money online, and it quickly spread to eBay, where it was the leading, at the time, e-commerce marketplace site, where the merchants found this great way to get paid immediately, which was non-obvious at the time and kind of crazy. And Kevin, when you say you were an investor pre-launch, how did that sort of come to be? Did Peter bring you into it or how did that opportunity sort of present itself? We met down at a restaurant called Hobie's right off campus

Starting point is 00:10:56 for brunch. Yeah, of course. And, you know, I had the good fortune of kind of a quick flip. It was almost this YC-like business where we were actually providing internet access to hotels. We had incorporated in April and we were acquired in October. And it wasn't anything like a life-changing amount of money, but it was a pretty good amount that allowed me to invest directly. And this is Connect Group? That was Connect Group. That's correct. And it was acquired by a company called LodgeNet, which way back when was the way to get movies on demand. They had that N64 controller that had the games baked in.

Starting point is 00:11:35 That's right. In fact, in the basement of a hotel, they used to have these first VHS and then DVD banks to actually serve up the film. So that's how pre-data and internet that it actually was. And they looked towards internet connectivity as the way to offer a second product alongside. Weren't your parents upset that you'd taken the earnings from that acquisition and put it all into an investment? I'm sure they imagined at that point you would use it to put it down, put it on a house and settle down. Well, it's a great point that Julia raises.

Starting point is 00:12:13 It's important to do exactly opposite of what your parents say. So my parents all along the way just thought I was insane. We're going to get Julia's opinion on this in a minute. And why this is important for founders is that when you're doing something kind of contrarian that is against the grain, your parents want you to do something safe. They want you to be a banker or a lawyer or a doctor. And so doing back then this internet stuff was considered, you know, really, really weird and a way to throw away your career. And so my parents all along the way, even after Julia and I started Eventbrite,

Starting point is 00:12:52 they still thought we were crazy. I think that's a fairly common theme among great founders, even when it's sort of reached escape velocity. Parents often, it's like a five-year lag on skepticism. That's a great way to phrase it. Maybe it's a's like a five-year lag on skepticism. That's a great way to phrase it. Maybe it's a KPI, is that you have your growth KPIs, your year-over-year growth, your key performance indicators of other methods of growth of the business. But that notion that your parents are still disgusted and dismayed and embarrassed is something to track on a monthly basis. Like a parental NPS, but you want it to be lower because you want them to be detractors.

Starting point is 00:13:29 Exactly. That's a good idea. Wow. Kevin, we could do a whole sort of Valley history thing here. Bring us through selling a company to PayPal and then take us all the way up to starting Eventbrite, and then I want to get Julia's side of the starting Eventbrite story. Well, early on, like Silicon Graphics, I think Julia was still in elementary school. She was

Starting point is 00:13:50 a ballerina. And so I'd rather not do this side by side comparison. I think that's very important not to do. We have 10 years between us. She's always got to point that out. It's like a whole generation. And it gets smaller and smaller with every year that goes by. Yeah. Like eventually someone's going to ask who is 10 years older. And then the agreement is that I can kill him. All right. Well, now that's, uh, now that's recorded.

Starting point is 00:14:17 Yeah. It is on the record. So there were, as we understand the history, at least, you know, PayPal in those early days, pre acquisition by eBay, there was a lot of stuff going on, like lots of great ideas, obviously tons of companies that got spun out. But there were a few ideas that got left on the cutting room floor that PayPal would do. One of those ideas was international money transfer, that you would obviously pick up the mantle with Zoom. If we have our history, right, there was also an events idea that maybe I got left on the cutting room floor, but we'll save that for a little bit later in the episode. How did Zoom then X OOM come out of your experience there? Well, I see that you both have done your homework extremely well. What had happened is that

Starting point is 00:15:06 a fellow named Dave McClure had joined David Sachs' group. David is an extraordinary product person and now runs a venture fund out here in the Valley called Craft Ventures. He's a great investor and a great product person. But Dave was running product at the time at PayPal. We had discussed, well, you're a payments platform. You're not just a payments company. And just like the great companies of the time and into the future, when you have a platform, you build an API. So this is kind of pre-stripe sort of things. And Dave McClure joined, and we turned out to be the first developers on it. And we kicked achieving right now. We've got to focus ourselves.

Starting point is 00:16:06 We would be going after this big lumbering incumbent that charges these egregious rates called Western Union. And this was a kind of missionary zeal for us because it was a way to help immigrants send money back to their families kind of faster, better and cheaper than the incumbents, the money grams and Western unions out there. And so you started that on the PayPal API. Was it a separate company from the start or did it get started sort of within PayPal? And then you sort of spun it out. How did that work? I would say I was never part of the PayPal mafia. I wasn't a team member there. I foolishly turned down advances to join the company.

Starting point is 00:16:46 But I had PayPal FOMO. When they opened the API and saw that we could be the first builders on top of that, we incorporated and built this entity. And Roloff and Peter had agreed to fund us off to be the first investors and invest 500K off the PayPal balance sheet. But we were foiled because after PayPal went public, it was quickly acquired. Meg Whitman and the team came in and acquired the business and the deal was off. So we had launched. We were sending money to the Dominican Republic and we started to go out and fundraise. And the venture

Starting point is 00:17:26 capitalists at the time just thought we were crazy in saying things like immigrants can't send money. Leave it to VCs to just say stupid non sequitur things like that. Insane, you know, and that's the whole point of venture and to have these types of misconceptions. But Peter Thiel exited as the deal closed and he wrote our first check for 500K. And the business was off and running. We had really bootstrapped it and we were able to show good unit economics.

Starting point is 00:17:54 And along the way, Roloff had joined Sequoia soon after and was watching us as well. And I think we were his first investment maybe. I think his second was YouTube. Yeah, it was either you or YouTube. But okay, so this is the perfect point. So all this, you're spinning up Zoom, starting to go out and raise money. You go down to Santa Barbara for a wedding. Correct. What happens at this wedding?

Starting point is 00:18:21 This is where I want to bring Julia into the story. So Julia, I think we should talk about your background before this too, but just for the continuity sake, take it forward from this wedding. So it was May. May 24th. Come on. May 24th, 2003. I could never forget that date. Until just now. And my first boss at MTV, Jennifer Saltsgiver, was marrying Kevin's classmate from Stanford, Dan Levy. And I had heard sort of about Kevin, but we hadn't met. And I ran into the church pretty late before the ceremony. And I was a reader in the wedding. So I had to sit on the edge. Which, by the way, is the best way to do a wedding because then you don't have to,

Starting point is 00:19:17 you know, be in the wedding party, but you still get, you know, the place of honor. I was winning. Yes. And so I needed to sit on the edge. So I kind of ditched my MTV friends to go sit where I could access the podium. And I asked a guy and a bunch of, you know, maybe his friends to move over. And so I shoved me over. Yeah, I've been shoving you ever since. He started talking to me and I was pretty nervous because I didn't know if the poem was up on the podium. And I was 23. So maybe, you know, I was a pretty mature 23, but I didn't bring the poem with me. So I was ruminating on that. And this guy was just chatting me up. And then I thought, well, you know, everybody at this wedding

Starting point is 00:20:03 is really old, so he's probably married or something. And then I went and did the did the reading. Poem was at the podium and came back and he said, you did awesome. I'm so proud of you. I'm like, who is this? Are you? She really did. She has a natural presence that has been important in building the culture at Eventbrite through, you know, in our second decade now. and the bride and the groom were running out. And I thought, what a great guy. I'll probably

Starting point is 00:20:45 never see him again because the wedding was massive. I mean, these are two wonderful people who have huge families and huge sets of friends who are just like those people, like they connect everyone. So we went to the reception and I was standing with my colleagues from MTV and we were talking about the ceremony. And all of a sudden, my current boss kind of gave me a weird look. And I turned around and there's Kevin standing there like a really sweet. It wasn't cheesy. It was sort of like a sweet puppy with a whole tray of drinks. And he's like, hey, do you guys want drinks?

Starting point is 00:21:24 And I'm like, OK, I'm not going to. I'm going to see this guy again. I'm a full-service investor. That's the type of investor I am. I'll bring founders drinks. He knows a good deal when he sees it. That sounds weird. Yeah.

Starting point is 00:21:40 So, Julia, you mentioned MTV there. Let's talk about your background before this day and what would become Eventbrite. You weren't part of the PayPal mafia. It was pretty different, but you did grow up also in the Bay Area. You end up working at MTV. You're one of the team that puts jackass on the air, which thank you, by the way, that was like my afternoons growing up in Pennsylvania by the TV. How did you end up with a pretty huge amount of responsibility like really quickly in your career at this big network at the time? Well, I wouldn't overstate it, David. I would say that I was coming up in my career from a very junior place. I got my foot in the door really early on by interning during college.

Starting point is 00:22:29 So I had two paying jobs and a full-time internship for most of my time at Pepperdine. And I was taking my classes at night. So my friends joke still that they used to call me grandma because, you know, I wasn't around a lot and I went to bed early. But I was able to really identify what I wanted to do in Hollywood pretty early on. And so I went straight from graduation into an assistant role in this series development department at MTV. And what I loved about it was that it was a blend of creative and content and business. It's effectively being a VC for the network. So you listen to pitches and you make some bets

Starting point is 00:23:09 and then eventually you see it invest and then you get to IPO. I was so fortunate because I was an intern when the Jackass team sent their demo tape in. And this was the pre-streaming era. This was early 2000s in Hollywood. There was nothing like this at the time. Yeah, you could tell that disruption was coming, but it was really sort of coming from content, not from technology. So seeing something like that was pretty incredible. And this was maybe

Starting point is 00:23:40 the second dawn of reality television. I was working in the, with the team that brought real world and road rules to audiences. So that was really sort of one of the first big franchises. And then this came along, it was just really different. And the other series development team was working on the Jessica Simpson show. So we were like, this couldn't be more different, you know, and there was a little bit of inner competition between the teams. And so we went for it. And huge praise to MTV for doing that. I think we saw it from seed to IPO.

Starting point is 00:24:13 I was on the team when it debuted. And then eventually we produced a movie. And the best parts of working on that show, by and large, were the weekly standards and practices, legal and OSHA calls that we did. And it was one big call where the guys would be on speakerphone and they would have faxed. I mean, again, I'm dating. They would faxed through these like one single spaced line pages of just ideas that they wanted to do. And then everyone had to go around and talk about how we could possibly do that on cable television. And it was, it was, it was real special. What's so amazing about all this is like, now, I mean, I haven't gone back

Starting point is 00:25:00 and watched, rewatched Jackass. I probably should have been prepped for this episode, but it probably is so tame, right? All this would be on YouTube and it would be David Dobrik and all the TikTok houses and kids doing all this stuff. And now it's just part of the mainstream, but this was the beginning. This was pre-YouTube

Starting point is 00:25:19 because I remember Kevin showing me the first YouTube video. What was like a... Oh man, I'm gonna mess it up. I feel like What was like a, oh man, I'm going to mess it up. I feel like it was like a cat at a zoo or something. It was like, it was short. It was like 15 seconds. It was Javid Karim who I went on with Keith for, to invest with a few years. Like the three of us seed invested in Airbnb and a few others to name.

Starting point is 00:25:42 But Javid, there were three co-founders of YouTube and Javid left fairly early on. But the very first video was Javid in front of an elephant making some commentary. At the zoo. Yeah. At the zoo. Yeah. All right. We are on the mother of all.

Starting point is 00:25:59 All tangent. Okay. So on the back of this, though, you guys start dating after the wedding. You're thinking about coming back up to the Bay Area. You're thinking about getting engaged. You get hooked up with the Current TV folks. And a lot of listeners probably don't remember this, but Current TV was like a big startup. The screensavers.

Starting point is 00:26:17 There was an amazing program. Yeah, Al Gore was one of the co-founders. And it was going to be, well, in a lot of ways, it probably was like a, the wrong vision of YouTube, but you get connected with them. You end up getting a job offer to join as part of the founding team of Current TV, right? And come back to the Bay Area. Are you thinking you're going to take this? Absolutely. I mean, I, you know, up until meeting Kevin, I had, you know, set my sights on something, achieved it, set my sights on something, achieved it, just was very linear. And I thought, you know, at the time I was at FX Networks, I'd moved on to a new opportunity and was working with the kings of content.

Starting point is 00:26:57 So there was really no reason why I should have left. However, spending two years going back and forth between San Francisco and L.A. really showed me the stark was obviously there was, but they weren't into content creation. And yet I would absorb a lot from Kevin and figured out that even though I grew up near Silicon Valley in a small beach town called Santa Cruz, I had no idea what was going on. I sort of missed the boom and the bust. And I was learning from Kevin that, you know, there's a place where you can go and create ideas and move really quickly. And velocity has always been an attribute that I've prioritized that I really value. So I sort of felt like I was in the wrong industry. But because I was such a, you know, kind of, in a way, a rule follower, I thought, well... You're like the organization kid, right? Yeah, exactly. I'll move to San Francisco. My parents, you know, my family,

Starting point is 00:28:10 I'm very close to my family. So that'll be great. We got engaged. So that was sort of the impetus of, okay, we're going to move forward with life here. And I will find a job where my skill set matches, but it also has influence from tech. And so I got this offer and it was super low. I mean, it wasn't going to be a senior member of the team because again, I'm still only five years into my work career. Like, you know, so I was going to be like a mid-level executive on the startup team and I was going to take it. And I paused long enough to double check with Kevin if I should go for it. And Kevin just seized on that moment. And I think I don't even know if you knew what you were doing, but he basically interrupted the entire thing.

Starting point is 00:28:55 Kevin, tell us the story here. Well, I'll take it from the wedding. think there's something uh important to that is that i sat next to julia at at the ceremony and you know we spoke and she had this beauty and poise and very articulate and you could see the intelligence there and then after the ceremony we were talking and i find out she tells me she's working on the show jackass and she had me at Jackass. Like, uh, it, it was the perfect person, uh, the perfect person for me. And at that point I knew that it would be a lifelong, uh, relationship. So you were ready to write the term sheet. I was ready to hand over that term sheet right there. That's a great analogy.

Starting point is 00:29:40 Signed, sealed and delivered. So how long before you got engaged? Like how long were you actually dating? I mean, you tell this amazing story of sort of this love at first sight. How long did you sort of test it out before you're like, we should definitely get engaged? Well, we met May 24, 2003. We got engaged on April 29, 2005. And we were married june 3rd 2006 now i've given away every old password but thank uh but thank god we all use one password now yeah is never give your your special dates away or that

Starting point is 00:30:16 used to be the way but now these password management applications like one password i just absolutely adore that's amazing i'm not an investor in 1Password, by the way. It's another company I have a company crush on. They're bootstrapped. We're going to get what you want. They're an incredible company. They just raised their first round after 12 or 15 years. It's definitely one to be on the show.

Starting point is 00:30:38 Yeah. All right, we're talking about you two getting engaged. Can we stop talking about startup financing for a moment here? By term sheet, I did not mean getting engaged. Kevin read me Pablo Neruda on a beach and then proposed to me. I love it. So I was referring to an offer to start a company, a counter offer to Current TV. Well, it's the job of a startup founder to find great, great talent no matter where it is. And so I happen to be living with and engaged to this potential co

Starting point is 00:31:06 founder with massive potential, and just got a lowball offer in and who just gotten a lowball offer. And I could see I could seize and have one of these magical experiences where we're not just we wouldn't just be married, but we would also be able to work together. It was a wonderful thing where we got to spend 24-7 together. So it seemed very magical. And I captured this talent, along with our third co-founder, Renaud Visage, who always gets left out because everyone wants to talk about the couple. And poor Renaud, who was the technical mastermind behind Eventbrite, just is always behind the scenes. So a shout out to Renaud for his amazing contribution. Still working at Eventbrite. Absolutely. Just like you.

Starting point is 00:31:53 Just like all of us. You took my job. I would have been still at Eventbrite had she not taken my CEO job. But she kicked me up to this chairman position where you really have no idea what I'm supposed to do as a chairman, except for sound important. And it certainly does. The company proposal, did you have the idea? You know, ticketing was something that you had talked about with the PayPal team on the PayPal API. Was Eventbrite in your mind as you were thinking about this? Or was it like, no, we're going to jump in together and we're going to figure something out, just us, and then we'll come to the idea?

Starting point is 00:32:30 Well, the thesis always was is there's this conventional thought in the valley that PayPal was this parasite on eBay. But it turned out to be the other way around. Well, I wouldn't call eBay a parasite. It turned out to be that that was simply PayPal, this payment platform's first vertical. And our thesis was that PayPal would open up this API, what they called it. And there was this directive at PayPal before it was acquired to find non-Ebay growth in merchants. And so bringing PayPal into money remittance was one mechanism to distribute. But also we saw this broken, messed up, still messed up industry of ticketing that

Starting point is 00:33:15 really needed a lot of help. So we wanted to build these verticals on top of PayPal. I was once told to, why are you building these pimples on the ass of PayPal? But that's really how all industries start. There is an API, there's a platform, and this payments OS would power so many great businesses. And who would think that today PayPal doing three quarters of a trillion dollars in payments volume or where Stripe is, it's absolutely extraordinary. And so, you know, we were fortunate to see that thesis come true. So Julia, in this moment where Kevin comes to you and says, wait, wait, wait, no, that offer's

Starting point is 00:33:53 not only too low, but you should be betting on yourself instead of accepting little money from a job. Take little money, but all the upside for yourself and let's do something together. Was this idea there or did that sort of come out in the coming weeks or months? It was there. I mean, we had talked about it and I remember when you were, you were still actually at Zoom for a little bit before you transitioned out and I would log into the customer support queue for what was then called Molligard and was essentially the prototype that you guys had built, or I don't know if you'd call it that, but it was the early product and people were using it and they were using it largely for either free events or small ticket

Starting point is 00:34:38 events. But there was a customer support queue that had been kept going and nobody was answering it. So I just went in and started investigating who these people were, what they were doing. And meanwhile, I had no idea what, what this was going to be like. This was, I was not, you know, the kid with the lemonade stand. So I didn't know sort of if I would make a great entrepreneur, but I did know that I love to learn by doing. So I really hated sitting in a classroom, but I did know that I loved to learn by doing. So I really hated sitting in a classroom, but I loved my internships and that I could bring some yin to Kevin's yang. We found Renault a couple months in, but it was just truly mom and

Starting point is 00:35:20 pop. And we moved in together and we found a space in Potrero Hill, which was in an old warehouse building. And the landlord was a good friend, good family friend. And he gave us a phone closet to start in. And so we put sawhorses and plywood desks. And that was like two days after you came to drive with me up from LA. So what was a whirlwind? The one thing I could say, there are a lot of complimentary attributes and skills that we have, but then there are these really big overlaps. And one of them is we like to move quickly. So it was just like, boom, boom, boom. And I remember pushing a sawhorse behind Kevin thinking like, I hope he's not totally nuts. We hadn't gotten married yet.

Starting point is 00:36:06 So I'm kind of like, there's a little bit of me that's going to reserve some, you know, skepticism that, but the thing that I remember about that time, there's a lot that I don't, but it's the thing that I do remember is just this overwhelming sense of optimism. And I think serial entrepreneurs are a little nuts because I think that they miss that chip in their brain that says this might not happen or this might not work out. And so Kevin's just insatiable appetite for taking risks and seeing the opportunities and then how hard he works. I mean, he gets more done in a day than most high-performing people get done in a week. It was just like, we were off to the races.

Starting point is 00:36:52 And so I think it just happened really quickly and we never looked back and we never considered another idea. A funny story that I don't know if you guys know is that we were allowed to be in the building for free for a short period of time if we told other entrepreneurs about the building. You found some pretty good ones, right? We found some great ones.

Starting point is 00:37:14 You guys do know the story. You're so well-researched. But we ended up in the span of a year collecting basically 12 other startup teams and we were all in one space. TripIt was one of them? collecting basically 12 other startup teams. And we were all in one space. And TripIt was one of them. TripIt, Flixster, Trulia was in the building.

Starting point is 00:37:36 Zynga started technically in the same space. BoxBee. Yeah, I mean, just those companies alone, TripIt became part of Concur. And Zynga, the lesson is, is when the team just receives checks. So they were getting paid with checks through the mail for installs. And so who was it? Andrew Trader was just opening checks all day. Yeah. So his job, a desk full of checks and was opening them up. And whenever you see that, I've learned as an investor, invest in that company. There's a rumor that Don Valentine went down to Cisco when it was

Starting point is 00:38:12 just the husband and wife and maybe a few others. And he was trying to understand what this router thing is. But then he walked into the back and there was a fax machine where orders were just coming in, you know, all the time. And he asked the operator of the fax machine where orders were just coming in all the time. And he asked the operator of the fax machine or the person who received the orders, is this always the case? The response was, yes, I can't keep up with it. Look at this big stack of paper. That becomes a very clear and simple investment thesis.

Starting point is 00:38:40 Now, there's not too many checks these days, but I think the equivalent is maybe your Stripe account or something of the like. Okay, so this is perfect, because so you start all this, like you would think you guys are both hyper-networked at this point. You know, Ruloff is partner at Sequoia. You'd think you'd just like, oh, obviously you raised money from your network and, you know, Peter and all that, but you didn't like you took a totally different path. And I think this is really interesting. Like in Julia, you were saying people are already using this. You already had transactions happening for two years. Basically it was just you guys in

Starting point is 00:39:21 Renault and you were building this with your own capital, bootstrapping, not taking salaries and just building the business. Why did you decide to do that? Well, Zoom, XOOM, the remittance business had been an exercise in dilution. We had to take a lot of capital. We had an excessive amount of fraud that we had to first fight off and then develop systems and algorithms to stop that. Remittance licenses were very expensive. So it was a fairly capital intensive business. And while we were very happy with where the business has grown and the outcome there. It was an exercise in over dilution. And in the second go around, or I guess the third, if you consider Connect Group,

Starting point is 00:40:11 in this go around, we really wanted to polish the product. It didn't require a lot of infrastructure. It was just the three of us. So for a long time, I mean, I think close to two years, we just wanted to get product market fit, build this business. So, you know, Julia would respond to customers and learn about them. And we would talk, I would work on the product design and hand them over to Renault, who would code and he spent most of his year in Paris, actually. So we were one third remote team at the time. And he would work because of the eight hour difference. He would crank away while we slept and we'd come in in the morning and there'd be all

Starting point is 00:40:51 these new features and attributes pushed. And then we would just wash, rinse and repeat. And we really feel and I feel strongly that that's the right way to build a company. That capital can be a good thing. But a lot of times financing really hinders companies, that it gets one focused on the wrong things. It doesn't really focus you on what's most important, and that's your customer. So we spent a few years doing this. The other side was this. Nobody wanted to invest in us. They were thinking, what is this strange business of these not large concert events, but everything under the sun that our creators, our event holders and merchants were publishing. We use Eventbrite for all of our acquired events. It's awesome.

Starting point is 00:41:39 But this is not what people are thinking about at the time, right? So there's Ticketmaster. And then there's you guys have talked about this, people were collecting checks at the door for everything below, you know, arena sized venue. How quickly did you identify that that gap, forget the arenas, but there is this whole sea of micro event entrepreneurs, essentially, that don't have tools? Was that the vision in the beginning? It was. I mean, our hypothesis was that there were far more people trying to sell tickets to events than, you know, anybody had ever sized because it was offline. And that the, you know, kind of fatty middle between, you know, the top of the pyramid being large arenas and the bottom being backyard

Starting point is 00:42:25 barbecues and birthday parties, that there would be this really rich, interesting middle layer that was global. And if we could build something with a self-service ethos that could, you know, meet the basic needs of as many different types of event creators as possible, that would continue to grow volume and scale and give us optionality in the future. And so we just focused on building a great product. But I think from a customer standpoint, for the first year or so, our earliest adopters were tech bloggers and people in that community who were hosting in-person events with their readers. So we were

Starting point is 00:43:03 the ticketing platform for the first TechCrunch Disrupt. And literally, we printed out a guest list and showed up and checked people in at the door, have the pictures to prove it. Then I remember about a year in, we started to see speed dating on the East Coast pop up. And in particular, there was a customer who ran an event called red carpet speed dating. And that started to flourish. And so we started to see the maps light up, we would. And you weren't like marketing in New York at this point in time, this was just organic adoption. Yes, yes. Yeah. I mean, it was it was just word of mouth. It was people buying tickets to other events. It was

Starting point is 00:43:46 SEO. So very early on, we figured out that every event listing would be user generated content. And so we could help all of those pages get highly indexed. And, you know, and so it was all these sort of organic means. And when that started happening, it felt like, okay, maybe there's a there there because tech bloggers and speed dating, those are two really different categories. No jokes, but they are different categories. And I think that we thought, wow, maybe there's, there's something there. And then because we were integrated with PayPal, we started seeing overseas transactions and events being published. And it was just all, it all sort of grew together. It took us a while to convince people that the market was big. Like that was

Starting point is 00:44:32 probably one of our biggest challenges when we, when we eventually did go out to raise money. So yeah, what, what scale did you guys built the business to over those two years before you before you raised money it was uh tens of millions of what we call gts gross ticket sales and in an age of today like if you had a few hundred thousand in in gmv you're raising a series b you're raising yeah you're way off to the races and we were saying like look at this this, like, look at this usage. It's incredible. And again, this organic nature, it was when you have three people, by the way, I'll go back to your earlier question of this two years of just soul development, you try to make everything so efficient and effectively build a perpetual motion machine,

Starting point is 00:45:20 meaning, you know, you have this almost deist theory of company building where you can create something just as this religious theory says that God created the universe and put all these laws of physics in motion and now it just operates. We wanted to build a platform that did that. We wanted to put something in motion and we would have creators or merchants find the business, publish on Eventbrite, sell tickets, hold their events. And the attendees would learn about Eventbrite and some of them would convert to creators or merchants. And you'd watch Rinse, Repeat again. And so you saw this snowball effect happening. And then we just experimented on it.

Starting point is 00:46:02 We found all these experiments of these new things called Facebook and Twitter and how they could actually amplify our platform. And we would just kind of ride each wave. And that was the real magic of what we were doing. And it was Sequoia Capital and Ruloff again identifying that we were really seeing that lift. And we received our Series A term sheet at the end of 2009. So that to me sounds like a whole year between when you said, hey, our two years of bootstrapping are behind us, we want to raise money. And then when you actually did raise money, am I off there? Or did that take a really long time? We weren't fundraising the entire year, but we did go out towards the end of 2008. It was the fall of 2008. And I don't know if you two young chaps are old enough, but it was a tough time for the economy.

Starting point is 00:46:56 The sky was falling. Oh my gosh, I bet. We met with 27 venture firms and we received 27 no's. We did raise the C fund. If you remember, we began in earnest in 2006. And so a big portion of the seed fund was our own money. So we rolled some of those PayPal proceeds. And so we raised a couple hundred thousand in a seed, in a friends and family round. Jeff Clavier was an early supporter of the Birches. Michael and Sochi Birch were a husband and wife team that we admired so much that had a

Starting point is 00:47:29 phenomenal outcome selling a business to AOL. And we went on our kind of merry way of building. And then you saw the 2008, 2009 economic collapse, the housing bubble burst. And we were thinking, oh, we're going to really be in trouble here. But what you see in these massive dislocations is that there's this movement online that the world figures out that it's far more efficient to use a service like Eventbrite and a traditional manner of doing that. And we see that today. It's a very important lesson as we see this dislocation that's happened due to COVID. And you see the future come faster, whether it's Zoom conferencing, whether it's food and grocery delivery with Instacart and DoorDash. This is an extraordinary

Starting point is 00:48:18 phenomenon. And it's also an opportunity for new players to out-hust hustle even more so the incumbents. We saw a lot of flipping happen of leadership where old media still had a strong foothold or real estate practices of the past have a strong foothold. And then a lot of these marketplaces became much more prominent and gained market leadership or Trulia, which we had the opportunity to write the first check into, became market leaders in the space and surpassed their offline equivalents. So we have this section of the show called the playbook. And rather than waiting for it later, I want to pull forward a bullet point here. And I think it really gets to why the perception of Eventbrite was that you didn't have a large market by VCs at first,

Starting point is 00:49:07 because, Julia, as you said, it was a shadow market. It was largely offline transactions, and so there was no good way to see that there was a large opportunity here. But the internet creates the opportunity for niches to individually be large and so this whole long tail of creators that otherwise didn't have tooling and were thus collecting checks at the door or not having an event because it was too high of a friction thing this basically unlocked new value for that massive long tail of i think you have something close to a million creators in 2019 using Eventbrite. And I think that if you would have told me in 2008 that, you know, a decade from now, there will be 1 million appreciating events using just this one company's tool set, it frankly seems ludicrous. Now it seems obvious, but then you could totally

Starting point is 00:49:59 see how you'd have to be Julia and Kevin Hartz, the crazy people who think this is actually going to happen for that to believe it. Well, this is why we wanted to be on the Acquired podcast. And now we, because you understand, you actually do your homework and you have a sophisticated understanding of the intricacies of this. You're like the strategy of podcasting. We also are going to try to recruit you two during this show, given that. Well, thank you.

Starting point is 00:50:29 Just briefly on TAM. So with Zoom, the remittance business, it was very simple to calculate TAM. Every central bank in every country recorded remittances coming in. So we could go to Sequoia and just say, this is a massive market and we'll take a couple percentage of that. And look, we have a multi-billion dollar business opportunity as our total addressable market. But that was so hard. That was very hard for Airbnb in the early days that how large is this creationist market that Ben described here. So I always struggled with trying to go through TAM. At some point when we did have some money,

Starting point is 00:51:09 we would try to find consultants to help us. And it just was impossible to try to peg down every one of these categories in this creationist notion. It's somewhat of a fruitless exercise. I don't know if that's going to be too controversial. But I think for something that is like Vemp, where you have a platform that enables an activity that is the human experience, I still to this day think it's just not helpful. I mean, there is some data that we can use to understand in which geo are certain categories a big opportunity. But there's nothing that comes close to the data that we have from what's going on at any given moment on the platform. And that's not going to be picked up in a study.

Starting point is 00:51:59 That's ours. It gives us such a clear indication of where we should focus our efforts, whether it's building product or go to market. I think Kevin's thesis was that you really focus on making it friction-free. And you give the tools that the people need to be successful and then the product that they love. And then you give them service that makes them feel loved. And then you keep building that. And today we're sitting on a lot of interesting data that's actionable, not just for us as a business, but actually for our customers.

Starting point is 00:52:37 You know, we can turn that data around to give them content and actionable insights on how they can grow their businesses. And I think one of the misnomers about Eventbrite is that it's for informal gatherings. These are small businesses and professionals. We're not used for RSVP events like backyard barbecues. It's actually a bad product for that. It's really for professional ticketed events. But I think that it's interesting because when we were out fundraising that first time, there was this persistent question, just like you maybe never would have thought that

Starting point is 00:53:12 bringing craft fairs online would be a big business. Our story is somewhat similar to an Etsy as well, where you see this extraordinary long tail emerge and come to the platform. And then all of a sudden you start creating market because you're bringing people from the offline to the online. And you're also helping people become more successful and build their businesses on the platform. I think that an inherent driver of our business has been that need for humans to gather. And that has been more powerful than ever. A second component has been that as traditional media like magazines, there are all these hobbyist magazines in different areas.

Starting point is 00:53:55 As that declined, the live experience grew. So magazines that were from train collectors to home and garden, their revenue, their income started to growing in offline events, and they really leaned into that. And so that was this kind of crossing of moving from the print and media world to the offline and gathering world that became so visceral and powerful. And then you had social media, which became about your experience, not the things that you owned. So just as your feed is more representative of you, you want to do interesting things and be in interesting places and you can

Starting point is 00:54:38 influence others. That's what Eventbrite was all about. And those beautiful, exciting experiences and the thing you were doing became this broadcast mechanism to display what you were about and who you are, whether it's a triathlon or whether it's attending a craft beer festival. That's awesome. All right, listeners, our next sponsor is a new friend of the show, Huntress. Huntress is one of the fastest growing and most loved cybersecurity companies today. It's purpose built for small to mid-sized businesses and provides enterprise grade security with the technology, services, and expertise needed to protect you.

Starting point is 00:55:15 They offer a revolutionary approach to manage cybersecurity that isn't only about tech, it's about real people providing real defense around the clock. So how does it work? Well, you probably already know this, but it has become pretty trivial for an entry-level hacker to buy access and data about compromised businesses. This means cybercriminal activity towards small and medium businesses is at an all-time high. So Huntress created a full managed security platform for their customers to guard from these threats. This includes endpoint detection and response, identity threat detection and response, security awareness training, and a revolutionary security information and event management product that

Starting point is 00:55:57 actually just got launched. Essentially, it is the full suite of great software that you need to secure your business, plus 24-7 monitoring by an elite team of human threat hunters in a security operations center to stop attacks that really software-only solutions could sometimes miss. Huntress is democratizing security, particularly cybersecurity, by taking security techniques that were historically only available to large enterprises and bringing them to businesses with as few as 10, 100, or 1,000 employees at price points that make sense for them. In fact, it's pretty wild. There are over 125,000 businesses now using Huntress, and they rave about it from the hilltops. They were voted by customers in the G2 rankings as

Starting point is 00:56:43 the industry leader in endpoint detection and response for the eighth consecutive season and the industry leader in managed detection and response again this summer. Yep. So if you want cutting-edge cybersecurity solutions backed by a 24-7 team of experts who monitor, investigate, and respond to threats with unmatched precision, head on over to huntress.com slash acquired or click the link in the show notes. Our huge thanks to Huntress. Well, listeners, as you know, normally in the acquired format, we would take you blow by blow all the way up through sort of how the company became what it became today. But since we have Julia and Kevin here, there's a few key moments that we want to sort of fast forward to and talk through with them. So we've talked through this sort of 2008, 2009 timeframe where they had mostly bootstrapped it. Once they started raising money, frankly, they raised a lot of money.

Starting point is 00:57:35 So Sequoia came in, did that Series C, and then they raised $20 million, then $50, then $60, then $60, then $130. I mean, we got this company became very well capitalized. It was growing very quickly. It was a part of this stay private longer ethos that was really dominating the 2014 to 2019 stretch of technology companies. And I want to talk about two things with you, Julia and Kevin. One, why stay private longer? And did you think about IPOing sooner? And then the second thing is a question for you, Julia, where you formally became the CEO, I think in early 2018, kicked Kevin to the curb and said, look, I've been operating this company

Starting point is 00:58:18 with you and now it's time to be the CEO. And Kevin, you went and spent some time at Founders Fund and obviously now starting a SPAC that we'll talk about here shortly. But Julia, I want to hear about the roadshow process. I want to kind of dive into what it was like to take a company public. Well, the only thing that I would just attempt to correct, which I'm a bit fearful to do because, again, I think you've done such great work, is we weren't opposed to going public. I think, yes, we stayed private pretty long, but I think that we always had an idea of Eventbrite being a public company. I think that being in the public markets sheds light on your business. Light is a great antiseptic and a great way to be a lean and thoughtful and high-performing company.

Starting point is 00:59:16 And so it was all part of the plan, frankly. And, you know, sort of one thing led to another. We acquired a big company. I think that the timing was really about what we had set for ourselves is this is the threshold of revenue. This is the threshold of profitability. This is what we want to see in the business. And then and then we'll consider going public. And we did. And we decided in January of 2018 that we would be going into high gear on the IPO process. And it took roughly nine months,

Starting point is 00:59:46 which I always like to joke, I could make a human in nine months. And it was a long process. Most of the work you do to get ready for an IPO, you do it well before you actually are in the IPO process. But the IPO process itself is this sort of cookie cutter. You have a plan, there's a Gantt chart and you go through the steps and there's a lot of cooks in the kitchen. And I enjoyed it because I figured that if we were going to dedicate nine months and, you know, countless hours and our hours are money, that time costs something that we would get the most out of it because the opportunity lost in focusing on this, I wanted the focus to actually yield something that was greater than, than that opportunity that we lost. So, so we focused on two things. One was making sure that our,

Starting point is 01:00:38 our public debut was rooted in the, the creators,, and their stories, that we put them front and center, and that we actually used them to get investors really on board and understanding our business. And that worked really well. I mean, it was a risk because I would go into these meetings and I'd start telling stories and I'm like, oh my God, somebody is going to tell me to stop and walk out. And it worked. It was like a light switch would go on and you could see it. And a person say, oh, you're not Live Nation Ticketmaster. You're not like the next, you know, this or the next that.

Starting point is 01:01:15 So that worked really well. And the second thing was that I wanted it to be a process that would just inherently make us better at operating. And so, you know, we really leaned on that process to help clean up some of the stuff that had been accumulating. There's barnacles after, you know, 10 years. And I wanted it to be something that, you know, we felt like was really additive to the company and to who we were as a business. And so we landed on September and all along. So one thing that I think maybe you guys don't know about me is that when I make a plan, that's the plan. So I decided that since Kevin's birthday is on September 18th and Roloff's

Starting point is 01:02:00 birthday is on September 19th, that obviously we'd be going public that week. And, you know, like when you do a remodel and you tell the team, I have a really big event coming up. And so you got to get it done for that. This was like that emotional push that everybody needed because it was not obvious. In order to land our date, we had to get on the roadshow right after Labor Day and pass over and through two high holidays. It was a rare year where the high holidays were falling right in the center of our roadshow. And then we had a ton of competition. In September 2018, a lot of companies were going public. You guys were at the forefront.

Starting point is 01:02:45 I mean, Uber wasn't public yet. Lyft wasn't public yet. The floodgates were just opening of all these companies like you guys that had been in the private market so long were just about to flip over. That's right. And actually, our opening bell day got stolen from us. So this is a part of the story that not many people know. I won't mention the company, but if you do your homework, you'll know.

Starting point is 01:03:07 What was the date, September 17th or 18th? We ended up going public on the 20th. I thought it was the 19th, which was your wife's birthday. No, we ended up going public on the 20th, and it was the market high day. We ended up going on a great day. At any rate, we stuck the landing. But the roadshow itself was insane. So George Lee from Goldman Sachs was one of the lead bankers.

Starting point is 01:03:32 And he said that in 25 years, he had never seen this many travel mishaps happen to one company during a roadshow. I mean, when we took off for our first day, we flew across the country. There was a hurricane on the East Coast. The pilot tells us he needs to land the plane. And I innocently ask, well, are we close to New York? And I realized we are in Williamsport, Pennsylvania, which is the home of the Little League Hall of Fame. Actually, the birthplace of our CFO, which was so insane. I mean, he sort of nonchalantly mentioned it when we are landing. And I'm thinking, well, we're gonna have to call your mom, because we have to spend the night here. But then we realized we had to start at 6am to train the sales force and to get going. And it was a Friday.

Starting point is 01:04:26 So we didn't. So this is trading the banker sales force to go and advocate on your behalf. That's right. Really important meetings. So going to each bank, we worked with Goldman Sachs and JP Morgan. And we were supported by Allen and Company. But we went to Goldman and JP to get their sales force trained up. And then we had our first day of full meetings in New York. And we couldn't sacrifice that day because it was a Friday. And if we missed that day, we'd blow our entire schedule. So we end up landing and it's like dark clouds and rain and crazy. And I'm still, you know, I'm from California. I'm still thinking, well, it just must be a hop, skip and a jump. Like we must be over the hill from New York or something. Well, anyways, a long story short, they bring around a

Starting point is 01:05:17 minivan and George Lee drives us through the Poconos four and a half hours to New York City. And along the way, we stop at Friendly's, which is a place I've never been to because I'm from California. I grew up on Friendly's. I had my first and only Fribble. Yes. And we made a music video, which is in the vault. Well, I see, I keep hearing all these trials and difficult challenges the road show is having and then i'm getting these lip dub videos back with bankers on the hood of

Starting point is 01:05:53 the car dancing and i'm saying like what is going on is this really a road show i like to make yeah well i like i like a good adventure know, and so we ended up making it. But we pulled in at like midnight, drove into New York, blasting Billy Joel, you know, and just New York state of mind. Just getting I mean, just in it. It was epic. But then so many things like that happened that when I think about doing the roadshow now on Zoom, we really missed the timing on that because watching Kevin do his IPO the other day, I was like, oh my gosh, so much money saved, so much brain damage saved. But you know, you didn't get to make a music video in the Poconos. And we didn't get a donut wall on the New York Stock Exchange floor, which was provided and became the most memorable thing that our two daughters only remember is that there was a donut wall.

Starting point is 01:06:52 They didn't care about this thing going public. They just wanted a donut wall. Well, they made you a donut wall. They did make me a donut wall for the SPAC IPO. Just to make sure I understand, Kevin, you weren't there for the roadshow presentations for Eventbrite. Julia, that was just you leading it as CEO. Just Kevin. He ended up meeting up with us the day before pricing, which was his birthday.

Starting point is 01:07:12 So we all arrive in New York. We meet up with Kevin. We're all exhausted. We celebrate his birthday. That was really fun. And then we're tired. So it was just dinner. A roadshow is really the CEO and the CFO.

Starting point is 01:07:26 I'm, again, just the chairman. I don't know what I do. I'm just like along for the ride. And I get to watch this incredible team do these incredible things. So I was there along for the leg in D.C., but toured around or met with some people I knew in D.C. while you did in Baltimore where you did all the hard work. Oh, right. I remember that. So then we rang the bell and it was I think about it differently now. But back then I had an idea that this was not an ending. It was beginning. You know, it's the starting line. And to be working on something for 12 years and have this be the

Starting point is 01:08:01 starting line was pretty overwhelming. But that day was so special because we had all of our family there. So there were 18 family members from our nuclear family. It felt like our wedding. We were all downtown together and we had our executive team, our first 10 employees, and a handful of customers who had participated in the roadshow and the video and the marketing materials. And I remember two things vividly. One was the president of the New York Stock Exchange, Stacey Cunningham, said that they had looked through the archives and had not yet found a picture of that many women executives on the podium. That was just our executive team.

Starting point is 01:08:47 We weren't like filling the rafters with women. And then the second thing was that Pete from Citadel, our market maker, our opener, he said he'd never seen that many children on the floor. And it was just, it wasn't even like we told everybody to bring their kids. It was just people brought their families. It was such a special day and there's kids running everywhere. Of course, I felt a bittersweet moment because I was, I think the second female founder to have gone public in a really long time. And the second youngest, second youngest, something that made me feel

Starting point is 01:09:21 honored, but also a little sad. very used to looking at. They're getting often caught up in the hype. And they're usually used to seeing male CEOs of these high growth, especially founder CEOs of these high growth companies. What was that like being one of the few women who led that process? Well, they largely kept their cool, but we actually didn't see one woman on the road show. We saw one. Actually, sorry. We saw one. And I'm dear friends with her. So that's Anne-Marie from Capital. So I think she was a friendly.

Starting point is 01:10:13 And she doesn't typically cover companies of our size. So there were zero women. And that wasn't a surprise to me. Because we had done the testing, the waters, and we knew a lot of investors. We had long-term relationships, thanks to Allen and company. And, you know, so it wasn't a surprise. But I do think that when I reflect on it, I'm very fortunate to have allies around me, you know, it's, it's, it's, I think working with Kevin has helped me understand that there's even just the smallest sort of act of support from men in power to women

Starting point is 01:10:46 can just like be the fuel that they need to run through any, you know, wall or, and so I just, I felt that I felt like I had, you know, people like, um, George Lee and Noah Wintraub and Ian Smith and Harry Wagner around me. And these are like, these are, these are like my tribe rule off. And it was just, it was just, and so it's not foreign for me to be the only woman, but yes, we did not see none of my gender on, on that trip. So. Ben, just to make a clarification, when you're on a roadshow, it's actually not bankers you're meeting with. You're meeting with portfolio managers of long only funds. Each portfolio manager manages a big pool of capital. It's kind of like a venture fund inside the venture fund.

Starting point is 01:11:30 And there's a lead portfolio manager that makes a decision, that yes or no decision to put an order in. So just to clarify there. And then two things just to add is that at the time, really it was clear to me that the student had become the master and that it was time for Julia to take my place. And thank God there's now a great CEO in the seat. The second thing I'll also point out is that during the periods that we had raised the most money privately were the hardest and most difficult periods for me because we were really fighting this gravity of overspending and creating inefficiency.

Starting point is 01:12:11 And it took us away from our roots as a capital efficient, highly effective, perpetual motion machine. And that's really what's driven our desire and drove our desire and drove our ethos to be out in the public market sooner and really learn great practices of capital allocation. But that begins at the earliest stage as a founder is you might have a big balance sheet, but you've got to discipline yourself to put that money to work in the right way of finding great people, not overhiring, not giving everyone the chance to be a manager. And these are the real reasons why the ills of private capital have been so difficult with the soft banks and others. It sounds like you're preaching the outsider's gospel, the great book about capital allocation

Starting point is 01:13:01 and CEOs and management. But as we were preparing for this, it seems like, you know, obviously a lot has happened in the world and to you guys since your IPO, you know, recording here in August, 2020 in COVID times, founders were afraid to go public before because the mantra was like, public markets are so short-term focused, you know, it's the private markets that are long-term, they're going to stick with you. But like, public markets are so short term focused, you know, it's the private markets that are long term, they're going to stick with you. But like, you guys have found some amazingly supportive shareholders and new investors as a public company, through, you know, the crisis and tragedy that is COVID that is obviously hugely impacted event break, you raised $225 million as

Starting point is 01:13:42 a public company. How have you found this whole experience? And I just want to throw a sort of some numbers out there. So listeners get a shape of the impact here, because I think it's worth having sort of a third party throw that out. So Eventbrite was doing something like 80 million bucks a quarter in I think, net revenue for several quarters leading up until obviously Q2, which of course then drops precipitously. It's a primarily in-person event business, around half of which the revenue comes from these sort of self-organized, mid-size, self-serve events. And so you see that 80 million number drop to like 8 million in that quarter. So imagine your business taking this 90% haircut. And then

Starting point is 01:14:24 Julia, I think turning it back to you, this question of like, so what do you do? And how do you figure out how to build the war chest and play offense from there? What happened on really early March, I would even point it to March 5th, was one of the most extraordinary impacts on a business I had ever seen in my whole career. There was just nothing like the onset of COVID and it came fast and quickly to a live entertainment and ticketing business that also served small businesses. So it was this double witching, this incredible tidal wave of damage to the business, to this triad of our company and our hardworking team members, our attendees, and our creators, as well as the investors in the business. So it really was, we'd almost been in a position that the sun was shining when you look back at everything else compared to what happened in March.

Starting point is 01:15:25 We had a phenomenal January and February. It was record. The business was humming along. And then March came and our four over four and a half billion in gross ticket sales that we achieved last in 2019 last year went actually in March to zero and actually negative, where you had more refunds than you did ticket sales. And that's unprecedented. You just don't see a business come to a grinding halt and even step back. And what Julia and her team did during that period was nothing short of just extraordinary. It's still the greatest comeback story I've seen in the making. I joke that Ben Horowitz's experience in the hard things about the hard things doesn't

Starting point is 01:16:12 hold a candle to Julia in her team story. I shouldn't say that because I won't get invited to a summer barbecue anymore. I'm sorry, Ben. But I will just let maybe Julia talk about what it was like in the trenches during that 90 days and how she shored up the balance sheet, how to go through some very extremely painful decisions and really capitalize the balance sheet so this business could endure for the long term. I'll save you on the Ben thing. I actually went back and read some of the parts that I'd highlighted from that book, The Hard Things About Hard Things. And I think two things resonate with me now more than ever. And one is embrace the struggle and not try to avoid the really difficult things and get right to the hardest thing. And two is see the silver lining in the worst case scenario.

Starting point is 01:17:02 You go through different scenario planning exercises as a public company. You have to like do these tabletop exercises. And I remember thinking in the second week of March, tabletop my ass. Like this is, there is no tabletop exercise that could actually prepare us for this. And it was the biggest crisis and the worst case scenario that you could ever imagine because the basis of our business that we had for all intents and purposes felt was just inherent to human experience was going away. And we were the tip of the spear. And so we were the first affected. We obviously weren't the only affected. But being in that sort of front pack, there were benefits to being in that front pack because we were, you know, moving quickly and immediately not only taking care of our people. So first I had to focus on the people because we needed to get everybody prepared to work from home. Part of that was a conversation I had with Eric at Zoom who said that despite what they build, they were a

Starting point is 01:18:05 work from office culture. And he was moving everybody to work from home so that they could get conditioned as they were going to be taking on these massive challenges. Julia, I'm curious, how do you think about the things that were unique to Eventbrite about this and the path going forward? Well, I think when you have such a massive business disruption, there are a few key things that you have to get right in order to make it through that eye of the storm. And we were immediately in the sort of fog of what felt like war because our revenue went from 100% to 0% in a matter of two weeks. And we huddled together, immediately created a strategy that would lead us through to where we needed to be as a company, not a strategy of how are we going to get through this crisis, as much as what would we do if we could do it all over again?

Starting point is 01:19:03 And asking ourselves that question allowed us to narrow our focus because we knew we had to. We couldn't be doing everything we were doing pre-COVID in the middle of this crisis and still make it through. So we immediately made a cut that was deep and it was painful. And it was a cut that we made not just for cost cutting sake, but actually to prepare the company to narrow its focus. And for us, this strategy was very clear. We have an incredibly vibrant self-sign-on channel that grows faster and has a stronger gross margin than our sales channel. We have a self-service platform that really doesn't need someone to be providing high-touch human service. So we had to rethink a bit about how our go-to-market would work, but that wasn't our biggest problem. Our biggest

Starting point is 01:19:59 problem was how we were going to get through to the other side. Sales channel, just to clarify, make sure I understand, that's like when you go and you sign a big customer, like a multi-thousand person music festival, and you enter a more complex sort of financial arrangement, and you change the cash flow dynamics, and they're assigned a headcount, and you work out a special deal for refunds. Each one of those is like a unique special child, more so than just, hey, Ben and David are hosting an acquired meetup. That's right. So we saw the first day of impact of COVID in early March. And in early April, we downsized the company by 45%. And we effectively removed over $100 million from our operating expenses. On May 11th, we announced our earnings along with our financing.

Starting point is 01:20:56 And on June 12th, we raised the second part of our financing through a public market convert, which was sort of a part of the original plan. And just moving at that fast pace allowed us to be stronger in this moment. And, you know, I can't help but look at all the opportunities that have emerged from this time because now we're a smaller team. We're focused on doing less. We're able to pivot our attention to helping small businesses survive this moment. Then we really focused on what could our product do to help our creators survive this moment. Then we really focused on what could our product do to help our creators survive this time. And, you know, online events is something that we've served since the beginning of time. You don't have to have an in-person event to use Eventbrite.

Starting point is 01:21:36 We're really the front door on the platform, the operating system for any type of event. So immediately we started to see creators and especially the ones that internally we call super creators who are frequent creators, they're small businesses, they're entrepreneurs, they started to pivot their events online. We saw Zoom become a highly searched term on the site. So that's when I reached out directly to them. And a few weeks ago, we announced our integration with Zoom and a native app. There were these moments and these opportunities that continue to play out as we help our customers not only now survive, but then thrive into this new world because things aren't going to be the same in the future. And it's our job to really prepare them for any scenario and to help rebuild the live experience economy. Being a public company through all that, have you been in any way held back by that, accelerated? Would it have been different if you were still private?

Starting point is 01:22:32 I think it would have been harder if we were private. I think that being a public company and having consistency of reporting and having some really dedicated long-term shareholders, as well as new interested investors, it gave us the opportunity to really play offense, as you say. And, you know, we ended up raising $375 million in total. So we now are on the other side of this with a clear direction, a small, vibrant, mighty team, a smaller, rather not small, but smaller focused team. And we're doing everything in our power to help our customers during this time. And it's, it's really core to who we are. It's building a stronger platform. It's creating a superior product experience.

Starting point is 01:23:19 It's helping them reach broader audiences through their online events. It's, you know, thinking about how we are going to be a better company going forward. I mean, there's really it's sort of like a near death experience and a new lease on life. And, you know, we needed the financial security to be able to get through this point. But I think that that as a public company, we were able to access the public markets for part of our financing. That was possible because we were a public company. We want to thank our longtime friend of the show, Vanta, the leading trust management platform. Vanta, of course, automates your security reviews and compliance efforts. So frameworks like SOC2,

Starting point is 01:24:01 ISO 27001, GDPR, and HIPAA compliance and monitoring, Vanta takes care of these otherwise incredibly time and resource draining efforts for your organization and makes them fast and simple. Yep, Vanta is the perfect example of the quote that we talk about all the time here on Acquired, Jeff Bezos, his idea that a company should only focus on what actually makes your beer taste better, i.e. spend your time and resources only on what's actually going to move the needle for your product and your customers and outsource everything else that doesn't. Every company needs compliance and trust with their vendors and customers. It plays a major role in enabling revenue because customers and partners demand it, but yet it adds zero flavor to your actual product. Vanta takes care of all of it for you. No more

Starting point is 01:24:42 spreadsheets, no fragmented tools, no manual reviews to cobble together your security and compliance requirements. It is one single software pane of glass that connects to all of your services via APIs and eliminates countless hours of work for your organization. There are now AI capabilities to make this even more powerful, and they even integrate with over 300 external tools. Plus, they let customers build private integrations with their internal systems. And perhaps most importantly, your security reviews are now real-time instead of static.

Starting point is 01:25:11 So you can monitor and share with your customers and partners to give them added confidence. So whether you're a startup or a large enterprise and your company is ready to automate compliance and streamline security reviews like Vanta's 7,000 customers around the globe and go back to making your beer taste better, head on over to vanta.com slash acquired

Starting point is 01:25:28 and just tell them that Ben and David sent you. And thanks to friend of the show, Christina, Vanta's CEO, all acquired listeners get $1,000 of free credit. Vanta.com slash acquired. Now on to grading. Well, as you both know, the way that we finish these episodes is with a grade. David and I have gone back and forth on like, how on earth do we do that for this episode? So what I want to do with both of you is what's the scenario where five years from

Starting point is 01:25:56 now we look back and say, A plus between product and strategy decisions, like what could be the A plus outcome from this? The A-plus outcome is the silver lining of being able to dramatically focus the business on the core of the business. And so oftentimes in expansive growth companies, you're placing a lot of investment bets in a lot of different areas and sometimes getting ahead of yourself. So the A-plus scenario would be really focusing back to the core that really grew Eventbrite, made it great in moving the world even faster towards the self-service ethos and building a better product about that, that right now, music venues have been by far the hardest hit. If you look at some of the ticketing competitors in those spaces,

Starting point is 01:26:45 they're accustomed to very manual and horrible platforms that require a lot of people, human software of sorts. And now to be able to make it so simple for a venue, a venue that doesn't have the balance sheet and resources to be able to do this in an automated way and to accept this just as companies accepted Salesforce or HubSpot or these other platforms. This really paves the way to the future. It also retires the incumbents in the same way that you saw just the inefficient businesses disappear during the 2000 crisis, the dot-com bust during the housing crisis, where it's actually an opportunity to gain market share and come out a real leader with a much sharper focus. That's the A-plus scenario. Yeah. Julia, what do you think? I think that the A-plus scenario is, you know, looking back at this time and having it be this incredible moment of, you know, rocket ship journey where Eventbrite is even more ubiquitous in live experiences than we are today and, you know, extraordinarily valuable on our product thesis and on our,

Starting point is 01:28:08 you know, company ethos. I'd be remiss to not say that the people who helped Eventbrite through this period of time on our team are heroes. And, you know, yes, Kevin and I are founders and we were in the trenches and working together and that was really special. And the people who have worked tirelessly beside us make Eventbrite a great company. So when I think of A+, I think of great business growth, clear market leadership, the sky's the limit on valuation, and a team that is the best in the business and a company that I really feel proud of helping to be a part of helping to shape. On the LP show, we had Nick Kekonas from Takon. The story and opportunity is so similar between your two companies. You know, there's this awful thing happened, took your businesses to zero. But there's this opportunity to serve your customers

Starting point is 01:29:01 even better set up for the future and take take huge share from the incumbents and i i've never felt more fired up to be honest i'm it's it's like day one and you know it's it's so exciting and i leap out of bed in the morning because it's not now about you know are are we going to make it through this it's about how do you take advantage of every single day? And what are you going to do with this opportunity? And so that's just that to me feels like I'm back in 2012. Again, it's it's really energizing. Well, that's a great, great place to leave it. Julia and Kevin, where can listeners get in touch? And what is the best way for anyone of acquired listeners to help Eventbrite right now?

Starting point is 01:29:48 I can be reached at Julia at Eventbrite.com. And Kevin at Eventbrite.com. I'm a terrible salesperson, so I'm not going to pitch Eventbrite. I think it's hosting an online event, being back out there when our events are back and together, being a patron of the arts and local community and getting back out and gathering again. We see this much like the analogy that we see over in history of the 1918 pandemic when following that horrible time period where millions of people lost their lives, people were back out in force and you had the roaring 20s and this almost hedonistic period, but you had also this jazz and the arts and all emerged in this period that people wanted to be back together

Starting point is 01:30:31 and gather as innate to being a human. Couldn't have said it any better. Well, listeners, that is it for this episode. If you aren't subscribed and you like what you hear, you should. And remember from the top of the show, our one call to action this episode, share your favorite episode with a friend, co-worker, or on social media. And now as we wind down this Eventbrite episode, we will be keeping the party going with Kevin to dive into his latest venture, a SPAC, that he, I believe, has IPO'd by the time we released this and is personally sponsoring to take some unicorn or unicorn-like company public here in the very near future. So if you aren't already a limited partner, you can click the link in the show notes or go to acquired.fm slash LP and all new listeners

Starting point is 01:31:18 get a seven-day free trial. Subscribing gets you access to the LP show where we dive deeper into the fundamentals of company building and investing in addition to our monthly LP calls where we talk with folks directly on Zoom, answer Q&A, and of course, our book club. And LPs, we'll see you to talk SPACs with Kevin on the other side. Bye.

Acquired - Eventbrite (with Julia & Kevin Hartz)

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