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4 months into lockdown, Eventbrite CEO Julia Hartz sees ‘exciting signs of recovery’

Published June 19, 2020

“Eventbrite is in the unique club that nobody wants to be in,” says CEO and co-founder Julia Hartz. “Which is the first affected and one of the most directly affected businesses of the COVID-19 era.”

Hartz, who co-founded the company with her husband Kevin Hartz and Renaud Visage, joined ExtraCrunch Live recently to discuss moving forward when your core business isn’t just threatened, but wiped out completely.

“You never as a founder — at least I never — ever wondered what would happen if the whole basis of our mission was tested,” she said.

The events world was one of the first industries to feel the pandemic’s impacts and will likely be among the last to be restored. For Eventbrite, which was built on a core business of in-person events and event ticketing, it meant making swift decisions to stay afloat.

External data show some bright spots. According to an operational update from Eventbrite, paid ticket volume on its platform increased 33% in May compared to April 2020. Eventbrite is down 82% in paid tickets in May 2020 compared to the same month year ago.

“A massive market and industry dislocation and disruption. I mean, we’re a living example of that,” she said. “It’s not a victory lap. Certainly, we’re seeing some really exciting signs of recovery, but it’s still very sobering.”

Hartz offered founders at all levels advice on how to work on culture during a crisis and offered tips on communication and transparency.

We also chatted about how open consumers are to paying for virtual events, how the company curates and moderates political events and how Eventbrite plans to address racial injustice beyond, in Hartz’s words, “episodic outrage.”

We pulled out a couple of highlights for you to peruse.

How she sees events changing in the next 18 months

Structurally, events are pivoting to in-person. So it’s not just pivoting online. A good example is the Beanstalk Music Festival in Colorado, a two-day music festival that pivoted to an in-person drive-in night concert. They were wildly successful in selling tickets to this new format.

It was a testament to the strength of their community and the pent-up demand to get together and listen to great music. But what we’re seeing beyond sort of those really creative uses of new types of space and venues that are outdoors are smaller events. Classes, workshops, seminars, small meetups are starting to come back. I think that as creators start to think about how to bring their community back in person, there’s a huge element of trust that exists in this new world.

We’re helping our creators establish that trust and be very upfront about what their event goers and attendees can expect in that moment as you bring yourself together in-person again.

When she knew the business would be materially impacted — and what she did next

How Reliance Jio Platforms became India’s biggest telecom network

Published June 19, 2020

It’s raised $5.7 billion from Facebook. It’s taken $1.5 billion from KKR, another $1.5 billion from Vista Equity Partners, $1.5 billion from Saudi Arabia’s Public Investment Fund, $1.35 billion from Silver Lake, $1.2 billion from Mubadala, $870 million from General Atlantic, $750 million from Abu Dhabi Investment Authority, $600 million from TPG, and $250 million from L Catterton.

And it’s done all that in just nine weeks.

India’s Reliance Jio Platforms is the world’s most ambitious tech company. Founder Mukesh Ambani has made it his dream to provide every Indian with access to affordable and comprehensive telecommunications services, and Jio has so far proven successful, attracting nearly 400 million subscribers in just a few years.

The unparalleled growth of Reliance Jio Platforms, a subsidiary of India’s most-valued firm (Reliance Industries), has shocked rivals and spooked foreign tech companies such as Google and Amazon, both of which are now reportedly eyeing a slice of one of the world’s largest telecom markets.

What can we learn from Reliance Jio Platforms’s growth? What does the future hold for Jio and for India’s tech startup ecosystem in general?

Through a series of reports, Extra Crunch is going to investigate those questions. We previously profiled Mukesh Ambani himself, and in today’s installment, we are going to look at how Reliance Jio went from a telco upstart to the dominant tech company in four years.

India’s richest man built a telecom operator everyone wants a piece of

The birth of a new empire

Months after India’s richest man, Mukesh Ambani, launched his telecom network Reliance Jio, Sunil Mittal of Airtel — his chief rival — was struggling in public to contain his frustration.

That Ambani would try to win over subscribers by offering them free voice calling wasn’t a surprise, Mittal said at the World Economic Forum in January 2017. But making voice calls and the bulk of 4G mobile data completely free for seven months clearly “meant that they have not gotten the attention they wanted,” he said, hopeful the local regulator would soon intervene.

This wasn’t the first time Ambani and Mittal were competing directly against each other: in 2002, Ambani had launched a telecommunications company and sought to win the market by distributing free handsets.

In India, carrier lock-in is not popular as people prefer pay-as-you-go voice and data plans. But luckily for Mittal in their first go around, Ambani’s journey was cut short due to a family feud with his brother — read more about that here.

Decrypted: The tech police use against the public

Published June 17, 2020

There is a darker side to cybersecurity that’s frequently overlooked.

Just as you have an entire industry of people working to keep systems and networks safe from threats, commercial adversaries are working to exploit them. We’re not talking about red-teamers, who work to ethically hack companies from within. We’re referring to exploit markets that sell details of security vulnerabilities and the commercial spyware companies that use those exploits to help governments and hackers spy on their targets.

These for-profit surveillance companies flew under the radar for years, but have only recently gained notoriety. But now, they’re getting unwanted attention from U.S. lawmakers.

In this week’s Decrypted, we look at the technologies police use against the public.

THE BIG PICTURE

Secrecy over protest surveillance prompts call for transparency

Last week we looked at how the Justice Department granted the Drug Enforcement Administration new powers to covertly spy on protesters. But that leaves a big question: What kind of surveillance do federal agencies have, and what happens to people’s data once it is collected?

While some surveillance is noticeable — from overhead drones and police helicopters overhead — others are worried that law enforcement are using less than obvious technologies, like facial recognition and access to phone records, CNBC reports. Many police departments around the U.S. also use “stingray” devices that spoof cell towers to trick cell phones into turning over their call, message and location data.

How COVID-19 transformed the way Americans spend online

Published June 16, 2020

Ethan Smith
Contributor

Ethan Smith is founder and CEO of Graphite, an SEO and growth marketing agency based in San Francisco. Ethan has served as a strategic advisor to Ticketmaster, MasterClass, Thumbtack and Honey.

COVID-19 has transformed the way Americans use their phones and the way they spend their time and money online. These shifts present both a number of challenges and a raft of opportunities for savvy growth marketers.

We’ve seen COVID-19 affect a number of verticals. A number of industries have taken a hit (like music streaming and sports), while some are expanding due to the pandemic (groceries, media, video gaming). Others have found distinctive ways to adjust the way they position and sell their product, allowing them to take advantage of changes in buyer behavior.

The key to being able to read and react to changes in this still-tumultuous time and tailoring your growth marketing accordingly is to understand how public sentiment is reflected in new purchasing behaviors. Here’s an overview of the most important trends we’re seeing that will allow you to adjust your growth marketing effectively.

By the numbers: A sheltering-in-place economy

Virtually all of the data we’ve seen shows a marked difference in buyer behavior following the WHO’s declaration of a pandemic on March 11, 2020. With consumers encouraged to stay home to deter the spread of COVID-19, it’s no surprise that the biggest change is the spike in online activity.

Image Credits: Branch (opens in a new window)

IoT solutions are enabling physical distancing

Published June 15, 2020

Tyler Cracraft
Contributor

Tyler Cracraft is an electronic engineer turned solution architect at Advantech who has more than a decade of experience working in the electronics technology industry.

If you’re a business owner or investor and are wondering about the long-term impacts of the COVID-19 pandemic on the business world, you’re not alone.

Today’s business leaders have been plunged into the deep end of telecommuting with little notice, and the way we do business has been impacted at almost every level. Travel is restricted, meetings are virtual and delivery of goods and even raw materials is being delayed. While some industries that depend on large gatherings are seeing extremely difficult challenges due to the pandemic, others such as the tech industry, see the opportunity and responsibility for innovation and growth.

As many states begin phased reopening, companies are trying to determine what the workplace and business environment will look like in a post-quarantine world. The first obvious step is the integration of personal protective equipment (PPE). Sanitization and face masks will become required and nonessential face-to-face meetings will be a thing of the past, along with shaking hands.

Additionally, relationship-driven careers such as sales and recruiting will have to find new ways to connect to be successful. Physical distancing rules will have to be established, which may include employees coming in alternate days while telecommuting the other days of the week to keep offices at reduced capacity. Large offices of 10 or more may implement thermographic camera technology for fever screening or other real-time technology-based health screenings.

One thing is for sure: IoT devices that enable physical distancing will become an integral part of reopening businesses, facilitating sales connections and embracing a different way of living.

Solutions for physical distancing

There are a variety of IoT devices available that can help business leaders successfully implement physical distancing in their offices. Thermographic camera technology coupled with facial recognition can create a baseline for each employee and then assist in determining if an employee has a temperature outside of their norm. Other remote health monitoring may also take place with healthcare providers, helping employees determine on a daily basis if they are well enough to go into work.

Marietje Schaake is ‘very concerned about the future of democracy’

Published June 15, 2020

Scott Bade
Contributor

Scott Bade is a former speechwriter for Mike Bloomberg and co-author of “More Human: Designing a World Where People Come First.”

Gauging growth in the most challenging environment in decades

Published June 11, 2020

Michael Whitmire, CPA
Contributor

Michael Whitmire, CPA, is co-founder and chief executive officer at Los Angeles-based FloQast, Inc., a developer of accounting close management software.

Traditionally, measuring business success requires a greater understanding of your company’s go-to-market lifecycle, how customers engage with your product and the macro-dynamics of your market. But in the most challenging environment in decades, those metrics are out the window.

Enterprise application and SaaS companies are changing their approach to measuring performance and preparing to grow when the economy begins to recover. While there are no blanket rules or guidance that applies to every business, company leaders need to focus on a few critical metrics to understand their performance and maximize their opportunities. This includes understanding their burn rate, the overall real market opportunity, how much cash they have on hand and their access to capital. Analyzing the health of the company through these lenses will help leaders make the right decisions on how to move forward.

Play the game with the hand you were dealt. Earlier this year, our company closed a $40 million Series C round of funding, which left us in a strong cash position as we entered the market slowdown in March. Nonetheless, as the impact of COVID-19 became apparent, one of our board members suggested that we quickly develop a business plan that assumed we were running out of money. This would enable us to get on top of the tough decisions we might need to make on our resource allocation and the size of our staff.

While I understood the logic of his exercise, it is important that companies develop and execute against plans that reflect their actual situation. The reality is, we did raise the money, so we revised our plan to balance ultra-conservative forecasting (and as a trained accountant, this is no stretch for me!) with new ideas for how to best utilize our resources based on the market situation.

Burn rate matters, but not at the expense of your culture and your talent. For most companies, talent is both their most important resource and their largest expense. Therefore, it’s usually the first area that goes under the knife in order to reduce the monthly spend and optimize efficiency. Fortunately, heading into the pandemic, we had not yet ramped up hiring to support our rapid growth, so were spared from having to make enormously difficult decisions. We knew, however, that we would not hit our 2020 forecast, which required us to make new projections and reevaluate how we were deploying our talent.

What to consider before publishing your diversity memo

Published June 9, 2020

In the past few weeks, several venture capital firms have published different variations of the same pledge: we’ll do a better job supporting the Black community.

My timeline, and I’m assuming yours too, has been filled with statements from non-Black venture capitalists saying that they will rethink how to be more inclusive with their hiring and wiring.

There is no need to applaud firms for taking long overdue steps to treat others equally. What is more important is how we’re going to hold these firms accountable going forward, after a history of inaction.

In a memo published on Friday, Matchstick Ventures outlined a series of commitments to fight racism and underrepresentation. The firm, which manages nearly $37 million dollars and is led by Ryan Broshar and Natty Zola, turned to Black entrepreneur Clarence Bethea for advice on how to proceed.

The pledge stood out for two firm reasons: It is more robust than most promises we have seen by high-profile firms, and it has actual numbers and a deadline, which are key to benchmarking progress.

Disclose your current diversity statistics

Matchstick says 7% of the companies it has invested in have Black founders or founding team members, which is seven times the industry average. Portfolio diversity data needs to be more largely released by the VC community because it’s the only way to determine if progress is being made. So far, beyond Matchstick, we’ve only seen Initialized Capital release diversity metrics. Union Square Ventures said that of moe than 100 investments, only a few have been in self-identified Black founders.

Decrypted: DEA spying on protesters, DDoS attacks, Signal downloads spike

Published June 9, 2020

This week saw protests spread across the world sparked by the murder of George Floyd, an unarmed Black man, killed by a white police officer in Minneapolis last month.

The U.S. hasn’t seen protests like this in a generation, with millions taking to the streets each day to lend their voice and support. But they were met with heavily armored police, drones watching from above, and “covert” surveillance by the federal government.

That’s exactly why cybersecurity and privacy is more important than ever, not least to protect law-abiding protesters demonstrating against police brutality and institutionalized, systemic racism. It’s also prompted those working in cybersecurity — many of which are former law enforcement themselves — to check their own privilege and confront the racism from within their ranks and lend their knowledge to their fellow citizens.

THE BIG PICTURE

DEA allowed ‘covert surveillance’ of protesters

The Justice Department has granted the Drug Enforcement Administration, typically tasked with enforcing federal drug-related laws, the authority to conduct “covert surveillance” on protesters across the U.S., effectively turning the civilian law enforcement division into a domestic intelligence agency.

The DEA is one of the most tech-savvy government agencies in the federal government, with access to “stingray” cell site simulators to track and locate phones, a secret program that allows the agency access to billions of domestic phone records, and facial recognition technology.

Lawmakers decried the Justice Department’s move to allow the DEA to spy on protesters, calling on the government to “immediately rescind” the order, describing it as “antithetical” to Americans’ right to peacefully assembly.

The rise of low-margin, no-margin unicorns

Published June 9, 2020

Yesterday evening, Vroom, a digital used car retailer, priced its IPO at $22 per share, a figure that was a full $7 above the low end of its first proposed IPO price range. The venture-backed firm first proposed a $15 to $17 per-share IPO price range, which it later raised to $18 to $20 per share.

Pricing at $22 per share meant that there was strong demand for the company’s equity during its IPO process. Pricing strength doesn’t guarantee performance as a public company, but it does provide a proxy for investor interest.

TechCrunch has covered a few IPOs lately, noting along the way that some recent offerings have featured heavy financial backing and incredibly slim margins. Not profit margins, mind, those don’t exist for the firms we’re talking about — we’re discussing gross margins, the most basic element of corporate profitability.

Gross margins are part of why software companies are so valuable. Their incredibly strong gross margins make their revenues, and therefore their operations, attractive to investors; higher gross margins mean more money left over to cover expenses and redistribute to shareholders via dividends and buybacks. Lower gross margin businesses, in contrast, have less money once they are done paying for revenue costs, making it harder for those companies to cover operating costs, let alone give away leftover funds to their owners.

So it has been to our surprise that Kingsoft Cloud, Vroom, and, soon, Lemonade are seeing such strong responses. It’s perhaps even more surprising that these companies managed to raise as much private capital as they did in their youth, despite not sporting gross margins that track with what we expect from venture-backed, tech and tech-ish companies.

With markets at all-time highs — and thus comparable valuations contentedly stretched — it’s probably a great time to take low-margin, growth-y companies public. But that doesn’t mean the situation makes perfect financial sense.