

TC50 startup SeatGeek raises money - Everest
http://www.techcrunch.com/2010/01/08/seatgeek-series-a-funding/

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jfarmer
These guys got rocked at TC50, deer-in-headlights style. Paul and Marc
Andreessen's questions were pretty devastating, given the team should have had
answers at the drop of a hat.

Paul asked why they were helping other people buy tickets rather than using
their secret price prediction algorithm to arbitrage them and make all the
money themselves (assuming the variance is high enough).

They didn't have a good answer to that, although it's plausible to me that the
variance is smaller than the transaction costs. But it's a bit like knowing
about Black-Scholes 10 years before anyone else and sitting on it.

Andreessen asked them what their TAM was, and it seemed like they didn't even
know what that meant. It was pretty bad; obviously their business isn't going
to capture 100% of the secondary market, because most of the money is made by
the people actually selling the tickets. At most you'd only make some % of
that.

In any case, it's good to see them moving forward. TC50 must have helped them
refine their pitch a lot, and given the quant nature of the investors they
must have seen an opportunity that wasn't totally apparent from their TC50
demo.

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hristov
I can give an obvious answer to that first question. It is because there is no
centralised clearing house for tickets, and in order to arbitrage them one
would have to buy them from individuals which ends up being very costly.
People will not send the correct tickets, they will send fake tickets, they
will claim they sent the tickets when you have not received them, etc. It is
not a coincidence that almost every auction site out there requires the
parties to do the final exchange among themselves.

As far as TAM goes, well I do not think it is fatal if a start up does not
know what that particular acronym means. A good investor would calculate that
themselves anyway. One would have to be very gullible to believe the TAM
estimations of the average company looking for funding (they all say
everything is a 100 billion dollar market).

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jfarmer
Yes, sure, a good answer which amounts to: transaction costs are higher than
the variance. That's the answer they should have given Paul.

TAM answers the question, "In the best of all possible worlds, how much money
would you make?"

As an entrepreneur you'd better have a good, if not totally accurate, answer
to that question. At the very least it shows investors how well you've
segmented and sized your target market.

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dminor
Just checked out an upcoming game that I'm planning on attending and wow the
interface rocks! At all the other ticket places I have to look at the list of
tickets, see what the section is, and then find it on the map to see if the
price and location are what I'm looking for. SeatGeek completely eliminates
this pain.

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jack7890
Thanks, appreciate it! Would love any other feedback you have.

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jswinghammer
I talked with these guys awhile back and they're very nice and have some
interesting ideas. I hope they do well.

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dnsworks
It's kind of pathetic that Arrington labels startups who demoed at TC50 as a
"TC50 startup" .. Slyly attaching his name to every startup that sucked up to
him enough to get onto the demo roster.

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bubbletown
Is this that different from YC companies getting the (YC 'XX) whenever they
appear on this site?

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axod
Surely investing!=demoing at.

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bubbletown
Of course it's not the same, but in both cases the writer is using a short
phrase to give context about the company.

Participating in TC50 is not as prestigious as participating in YC, but it is
not trivial either. As a reader, I care about whether a company launched at
TC50.

~~~
axod
To be honest, I don't. I don't know 100% how much mentorship input assistance
advice, etc TC50 give, but it seems likely that YC or any investor give far
more.

The "TC50 startup" thing just seems a bit like newspapers who constantly feel
the need to remind you that they broke certain stories "As previously
exclusively reported in this very paper" etc.

Just because someone launched at a certain venue, doesn't mean that venue can
really claim any ownership. But then it's a common enough thing - you get
stars/singers/actors who are constantly labeled as 'being discovered by X'
which must be pretty irritating for them.

sorry, went off on a rant there :/ just my 2c

