An interview with Seatwave’s Joe Cohen
The Seatwave founder tells us why he’s giving the ticket touts a run for their money
A few years ago, if you wanted a ticket to a sold out gig your options were limited. You could make your way down to the venue on performance night hoping to bump into a tout, or you could take your chances on eBay bidding on a ticket that may not even exist. But across the pond, a couple of savvy entrepreneurs had already noticed a gap in the market for a sanctioned fan-to-fan secondary ticket exchange, and it didn’t take long for the idea to make its way over here. Today, there are a few names jostling for prominence in the sector. However, with two million visitors a month, and 700,000 tickets on sale at any one time, it’s Seatwave, founded by Joe Cohen, that’s really standing out from the crowd.
Joe has a great track record where online ventures are concerned. Originally from Cleveland in the States, he came to England over a decade ago to set up Ticketmaster’s European site, which was followed by a senior role at Match.com. Ticketmaster had shown Joe the inadequacies in the ticketing market, and he was toying with the idea of a secondary marketplace, but it wasn’t until a series of talks with VC firm Atlas Venture that the idea started to come to fruition.
“I wasn’t planning to actually do it,” says Joe. “I started talking to Atlas about the idea and over the course of a month we worked out how it could work and where the market advantages were. I put a plan together for their investment committee and they said ok.”
It’s a rare occurrence in the world of venture capital, and while most entrepreneurs tend to bootstrap for at least a few months before seeking VC investment, Joe says having Atlas on board from the outset had some phenomenal advantages.
“We’re trying to legitimise a space that’s traditionally been a grey market. Being able to point to Atlas, reputable people who’ve had numerous exits, makes a big difference to your credibility.”
The early cash – an initial $3m – also meant there wasn’t the need for too many tough sacrifices early on in the business’ life. “If you’re not funded, the temptation and pull of gravity is to cut corners to focus on cash. I’m not saying we weren’t cash conscious but we knew we were going to make payroll so we didn’t have to become friends with the big ticket brokers trying to sell at high prices. It’s easier to act with principle when the wolf’s not at the door.”
Two years down the line and Joe has managed to keep that wolf at bay a bit longer. A second round of funding gave the company a further $8m to work with. Much of that was ploughed into an aggressive marketing strategy which successfully elevated the Seatwave profile above competitors such as Viagogo and Get Me In!. A radio campaign launched in 2008 paid for itself within six weeks, while London Underground advertising has also driven a lot of traffic to site.
Joe believes the high profile advertising fuels consumer confidence in the offering – something that Seatwave has had to work extremely hard to overcome given the strong black market in ticket touting. “When we started we created protection schemes called Ticket Integrity, and we’ve raised the bar of consumer protection even for the primary market.”
Strict rules have been built into the Seatwave platform ensuring the tickets on sale are legitimate and more importantly, actually exist. Buyers pay Seatwave for their tickets plus a 15% fee, while sellers only receive their money, minus a 10% fee, after the event has occurred. The system is a complete reversal of the eBay method where a buyer could be paying the seller months in advance of the tickets even being distributed by the promoter. “There’s no incentive for the seller to commit fraud because we’ve taken the profit load out of it,” says Joe, who has managed to get fraud down to less than 0.5% of all transactions.
Joe says the team are chipping further at that fraud figure and getting better at stamping it out as the months go by. Meanwhile, the site’s traffic and volume of ticket exchanges is rising at an extraordinary rate – Seatwave was recently named Europe’s fastest growing digital company at the Media Momentum Awards. But most of the UK’s £1bn secondary ticketing market is currently offline so there’s still a massive share of the pie to divide up, and Seatwave has already demonstrated it’s ready for the challenge even in the midst of a recession. “If the economy was like it was 18 months ago I think we’d be much bigger and would have grown much faster. Even so, we grew 200% in a year and that’s nothing to sneeze at.”