Expansion Gamble:
Eventbrite acquired Ticketfly in 2018 to expand its user base and offer more ticketing options. The acquisition was a significant gamble, as it involved integrating two large platforms and managing the transition of customers and employees.

Overhauling Pricing Model:
To become profitable, Eventbrite overhauled its pricing model in 2019, moving from a transaction-based fee to a subscription-based model. This shift required convincing customers of the value of the subscription and ensuring a smooth transition to the new model.

Surviving the Pandemic:
The COVID-19 pandemic caused a global shutdown of live events, severely impacting Eventbrite’s business. The company responded by pivoting to virtual events, offering fee waivers, and working closely with customers to navigate the crisis.

Takeover by Hackers:
In 2018, Eventbrite experienced a significant security breach, resulting in the theft of customer data. The company responded quickly to contain the breach, notify customers, and implement enhanced security measures.

Rebirth from the Ashes:
Despite the challenges, Eventbrite emerged from the pandemic stronger than ever. The company’s focus on virtual events and its commitment to customer support helped it adapt and thrive in the new landscape.

Power of Human Connection:
Throughout its journey, Eventbrite has maintained a focus on the power of human connection as its North Star. The company believes that events bring people together and create meaningful experiences, which has guided its decisions and strategies.

Original Pricing Challenges:
Eventbrite initially operated on a pay-per-ticket transaction fee model, which was not scalable or profitable. The company struggled to capture value from its wide range of customer segments due to a one-size-fits-all pricing approach.

Crucible Moment:
In 2016, Julia Hartz, the newly appointed CEO, faced the challenge of transitioning Eventbrite to a path of sustainable profitability. The company needed to determine how to change its pricing model to capture more value and differentiate its offerings.

Pricing Model Overhaul:
Eventbrite experimented with various pricing models, including price hikes, add-ons, and subscription models. The leadership team conducted thorough analysis and ran experiments to understand customer segments and price sensitivity.

Implementation of Three-Tiered Pricing Model:
In October 2017, Eventbrite introduced a three-tiered pricing model: Essential Package: Access to basic Eventbrite features. Professional Package: Included more sophisticated promotional tools. Premium Package: Reserved for customers with contracts. This comprehensive overhaul required the collaboration of all departments, including a dedicated Tiger team to ensure project focus.

Positive Results:
The new pricing model led to an increase in revenue per customer. The total creator count saw a boost in momentum. The majority of customers adopted the professional package, while the essentials package attracted new users.

Key Lesson:
CEO leadership is crucial in pricing changes, especially when associated with risk. A dedicated leader is needed to drive the change and take responsibility for its outcome.

Decision to Acquire Ticketfly:
Eventbrite noticed its growing popularity among indie promoters, artists, music venues, due to its neutrality and focus on serving creators and attendees. Recognizing the potential of the music genre, Eventbrite considered acquiring Ticketfly, a sales-driven company with a loyal customer base in the music industry.

Concerns and Challenges:
The acquisition raised concerns due to Ticketfly’s different customer base, sales-driven approach (contrasting Eventbrite’s product-led growth), and the risk of losing credibility with Ticketfly’s customers. Integrating the two platforms proved to be more complex and time-consuming than anticipated, leading to customer churn, management turnover, and delayed benefits from the synergies.

Integration and Customer Migration:
The integration process took longer than expected, causing difficulties in customer migration and preventing the realization of modeled synergies. Uncertainties during the migration process opened opportunities for competitors to poach customers.

Data Breach:
In June 2018, Ticketfly’s platform was hacked, resulting in a disruption of services and a crisis mode for the company. The breach exposed vulnerabilities that were amplified during the changeover, leading to a prolonged period of recovery and damage control.

Lessons Learned:
Acquisitions should be approached with a higher burden of proof, especially when they represent a significant portion of the business. Elongating the integration timeline and allowing for a more gradual approach could have mitigated some challenges. Despite the difficulties, the acquisition brought together two different cultures and resulted in valuable contributions from former Ticketfly employees to Eventbrite.

IPO:
A year after the acquisition and amidst the integration challenges, Eventbrite went public on September 20th, 2018.

Initial Public Offering (IPO) and Ringing the Bell:
Speaker 02 expressed a mix of emotions during Eventbrite’s IPO, from excitement and elation to sentimentality and sadness. The presence of early employees, customers, family, and friends made the IPO day special. The president of the New York Stock Exchange highlighted the significance of having so many women on the podium, marking a bittersweet moment.

Challenges in the First Year as a Public Company:
Eventbrite faced difficulties in digesting the Ticketfly acquisition and disappointed Wall Street in its first quarter. Making an early slip-up as a public company can lead to prolonged skepticism from investors, prolonging the company’s recovery. 2019 was a challenging year, but the company entered 2020 with renewed hope.

Operational Changes and Focus on High-Value Customers:
In late 2019, Eventbrite implemented operational changes to clarify investment priorities and simplify its objectives for the year. Research revealed a high-value segment of frequent creators, prompting the company to improve the product experience for this user base. Cost reductions were also made to streamline the business.

Positive Start to 2020 and the Impact of COVID-19:
January and February 2020 saw strong revenue months, indicating a potential recovery from the previous year’s challenges. The company was optimistic about beating Wall Street estimates and climbing out of its penalty box. However, the sudden arrival of COVID-19 in March brought a new set of challenges, as Speaker 02 received an early morning text from the CFO signaling the pandemic’s impact.

Black Swan Event:
In March 2020, Quake Capital recognized COVID-19 as a significant threat and published a memo highlighting its potential impact. Within two weeks, Eventbrite lost 90% of its revenue due to pandemic-related shutdowns.

Leadership in Crisis:
CEO Julia Hartz and co-founder Kevin Hartz demonstrated strong leadership and commitment to saving the company. Kevin created a home office war room to facilitate collaboration and focus on strategy.

Five Lanes of Focus:
Julia identified five key areas of focus for the company’s response: Brightlings (employees): Ensuring their well-being and adjusting to the new reality. Creators: Supporting creators whose businesses were affected by event cancellations. Consumers: Facilitating quick refunds and addressing their concerns. Investors: Communicating transparently and seeking financial support. Advanced payouts: Addressing the issue of advanced payments made to creators for events that were canceled.

Reimagining the Business:
Julia challenged her team to imagine starting the company over again, focusing on lessons learned. The team identified opportunities to improve the product experience, focus on frequent creators, and strengthen self-service capabilities.

Strategic Transformation:
By late March 2020, Eventbrite had a plan and strategy to navigate the crisis. The company committed to cutting $100 million from its operating budget and making necessary changes.

Layoffs and Financial Restructuring:
On April 8th, 2020, Eventbrite announced layoffs to realign its cost structure. The company sought debt financing due to the high cost of raising equity capital during the crisis. Francisco Partners provided a bridge loan, securing much-needed financing.

Building Tools for Crisis Management:
Eventbrite developed tools to reverse its revenue generation machine and enable bulk refunds. The company introduced the option for consumers to receive credit for future events instead of refunds, recognizing the importance of supporting creators.

Adapting to Virtual Events:
Creators began hosting events online, expanding their reach and audience. Eventbrite’s product teams focused on developing tools to support creators’ transition to virtual events.

Lobbying Efforts for Small Businesses:
Eventbrite advocated for the inclusion of live event producers in the Small Business Act. The company’s efforts resulted in a specific carve-out for live events, providing financial support to the industry.

Resilience and Customer-Centricity:
Eventbrite’s strong customer focus and goodwill allowed them to adapt and continue serving their customers during the crisis. The company’s commitment to listening to customer needs enabled them to develop effective solutions.

Personal Growth and Leadership:
Julia Hartz, Eventbrite’s CEO, gained confidence in her leadership abilities during the crisis. Hartz’s maternal and feminine instincts helped her navigate the challenges and connect with her team and customers.

Learning from the Crisis:
The crisis presented an opportunity to revisit assumptions and shed unnecessary baggage. Eventbrite emerged from the crisis stronger and more resilient, with a renewed focus on innovation and customer service.

Key Takeaways from Eventbrite’s Pandemic Crisis:
Eventbrite’s crisis forced them to focus on their core strategy and customer base, leading to a renewed sense of purpose.

Mimicking the Clarity of a Crisis:
One can benefit from the clarity that a crisis can bring without experiencing a calamity. Trusting one’s fear instinct and confronting it head-on is essential for overcoming challenges. Identifying what matters most and focusing on it can help guide decision-making during difficult times.

The Future of Events:
The innate human desire to connect underpins the importance of bringing people together through live experiences. Virtual events and the metaverse offer exceptional growth opportunities for experienced creators.

Appreciating the Value of Business:
Understanding the ephemeral nature of businesses can lead to a greater appreciation for their value.

Production Credits:
Crucible Moments is produced by Epic Stories, Vox Creative Podcasts, and Sequoia Capital. Special thanks to Kevin and Julia Hartz for sharing their stories.