MadeIT, a San Francisco-based startup we profiled over a year ago, is leaving the crowded space of event planning and invitation applications and entering the equally-crowded space of online ticketing service providers.
CEO Stephen Weir told me that the reason for the new direction is simply an economical one.
More specifically, he stated that he took a good look at the balance sheet earlier this year and ultimately decided the cost of acquiring a customer for the ‘old’ MadeIT was far too high compared to the projected revenue from selling ads based on their traffic projections, and that Facebook was effectively going to kill the event social networks / invitations service providers one by one anyway. Basically, he painted a pretty dark picture for startups like Evite (Ticketmaster), Eventful, MyPunchbowl, Socializr and a slew of other similar services.
Rather than giving up, Weir and co-founder Jonny Hendriksen decided to rethink the service from scratch and came up with a low-priced solution for helping organizers of small and medium-sized events sell tickets online. MadeIT aims to provide them with a set of tools for end-to-end event management, including publishing, promoting and collecting online payments for events (the latter comes with PayPal and Google Checkout integration). The service doesn’t cost a thing for free events, but MadeIT retains a commission of 2.5% for paid events, with a minimum charge of $0.99 and a maximum of $9.99.
Like many of their competitors, which include Eventbrite, TicketLeap, amiando and Eventbee, they face a chicken-and-egg problem: you need high volumes of events to generate enough, often non-recurring, revenue out of commissions on ticket sales, while the costs of marketing the service to potential customers is relatively high. The company claims to have come up with “innovative customer acquisition strategies” that bring in a lot of qualified leads for them to build a sales model around.
Personally, I applaud the fact that they’re going at it without taking a dime of funding from anyone else but themselves, but time will tell if MadeIT has what it takes to stand out in the crowded space they’ve entered, which is filled with similar startups who have a bit more breathing room thanks to institutional and angel investors.
(Disclosure: I am a partner in a soon-to-launch Belgian ticketing/event startup, and will be facing some of these challenges myself).