There is lots of useful and interesting detail about how the ticketing industry works in this thread, and I certainly sympathize with the post's complaint. But I'd like to briefly (and mildly) chastise the idea for a more abstract reason, if you'll indulge me.
The post advocates starting a company in order to build and sell a new software application. If this resembles every other business app I've ever written or used, the developer will quickly run into a complex set of rules and requirements that is almost impossible to fully anticipate or characterize a priori.
The motivation for doing so is admittedly egregious fees charged by an incumbent vendor. Imagine one is successful in building the app, despite all of the unforeseeable obstacles. All the incumbent would have to do is lower its prices, either accepting slightly lower margins to maintain the fee pass-thru to its partners or eliminating such fees as the hypothetical startup would do.
In other words, the proposal is to dedicate years of effort to a problem in order to compete on price by 10-25%. This is generally a losing proposition. If one can achieve a 90% lower price for the same or slightly better functionality that an incumbent will find difficult to match (the famed 10x price/performance improvement), then one may have something sufficient to build a business around, depending on how difficult/capital intensive it is to create the product--ignoring all of the other barriers to adoption that exist in this or another industry.
But faced with a narrow price-performance improvement, incumbents can either lower prices or, if it's a functional improvement, invest a similar or lesser amount of capital (they already have employees, a brand name, a salesforce, etc. that a startup would have to build from scratch) to match to the feature set.
Don't get me wrong: I don't want to talk anyone out of the desire to start a company, to improve a process or an application, or to return excess profits to the consumer in the form of lower prices. But part of being a successful entrepreneur is picking the right battles and bringing an unfair advantage to bear against tough competition, something I and many others still struggle to achieve. In this case, I don't see the unfair advantage or the 10x improvement, and I think we should challenge each other to be hard-nosed realists about where we focus our collective entrepreneurial talents.
Excellent analysis. But I think you've missed an important point. Unfortunately, the real customers in this market aren't the people buying the tickets, because they aren't the ones deciding whether or not Ticketmaster gets the gig. Ticket-buyers are the veal.
If you want to displace Ticketmaster, you need to find something that's 10x better for the venue, not the buyer. Or you need to find a way to disrupt the venue/artist relationship sufficiently that the venue's choices don't matter.
Comments
There is lots of useful and interesting detail about how the ticketing industry works in this thread, and I certainly sympathize with the post's complaint. But I'd like to briefly (and mildly) chastise the idea for a more abstract reason, if you'll indulge me.
The post advocates starting a company in order to build and sell a new software application. If this resembles every other business app I've ever written or used, the developer will quickly run into a complex set of rules and requirements that is almost impossible to fully anticipate or characterize a priori.
The motivation for doing so is admittedly egregious fees charged by an incumbent vendor. Imagine one is successful in building the app, despite all of the unforeseeable obstacles. All the incumbent would have to do is lower its prices, either accepting slightly lower margins to maintain the fee pass-thru to its partners or eliminating such fees as the hypothetical startup would do.
In other words, the proposal is to dedicate years of effort to a problem in order to compete on price by 10-25%. This is generally a losing proposition. If one can achieve a 90% lower price for the same or slightly better functionality that an incumbent will find difficult to match (the famed 10x price/performance improvement), then one may have something sufficient to build a business around, depending on how difficult/capital intensive it is to create the product--ignoring all of the other barriers to adoption that exist in this or another industry.
But faced with a narrow price-performance improvement, incumbents can either lower prices or, if it's a functional improvement, invest a similar or lesser amount of capital (they already have employees, a brand name, a salesforce, etc. that a startup would have to build from scratch) to match to the feature set.
Don't get me wrong: I don't want to talk anyone out of the desire to start a company, to improve a process or an application, or to return excess profits to the consumer in the form of lower prices. But part of being a successful entrepreneur is picking the right battles and bringing an unfair advantage to bear against tough competition, something I and many others still struggle to achieve. In this case, I don't see the unfair advantage or the 10x improvement, and I think we should challenge each other to be hard-nosed realists about where we focus our collective entrepreneurial talents.
Excellent analysis. But I think you've missed an important point. Unfortunately, the real customers in this market aren't the people buying the tickets, because they aren't the ones deciding whether or not Ticketmaster gets the gig. Ticket-buyers are the veal.
If you want to displace Ticketmaster, you need to find something that's 10x better for the venue, not the buyer. Or you need to find a way to disrupt the venue/artist relationship sufficiently that the venue's choices don't matter.