Part of Bob’s continued ramblings.
Last week Eventbrite announced Q2 earnings, and put simply, they were a Train Wreck. That blog reviews the details of the mistakes that have decreased their ticket buyers by 16% in the past year. This has led to a sharp decline in their stock price:
But this blog looks at the reason behind the reason – an unbalanced company. They forgot that a company’s success is driven by keeping a careful balance between Shareholders, Employees and Customers. In the past I have often referred to this as the Three Leg Stool. We also have it as the final virtuous cycle in our Guiding Principles.
In an effort to please their investors, they have taken advantage of their employees and their customers.
Employee Disregard
These are their actions the past several years:
- Layed off 45% of staff at the beginning of the pandemic in 2020. (At RunSignup, everyone took a 50% reduction in salary and everyone stayed).
- Layed off 38% of staff in 2023 – 8% reduction in staff, and 30% were let go to enable hiring people in India and Spain.
- Lay off 11% of staff now in 2024 – 100 people were let go.
Search LinkedIn to see how current and past Eventbrite employees feel. And Eventbrite’s leadership, including Julia, have this false upbeat PR effort to make it seem like being a “Briteling” is wonderful. Their employees know better.
Employees (especially long term ones) matter, and they have effectively chopped off one leg of the three leg stool.
Customer Take Rate
In last year’s Q2 Earnings call, Julia and Lanny (the CEO and CFO/COO) used the word “Take Rate” 9 times in a 37 minute earnings call, and repeatedly in their Shareholder Letter. And that was only their increase in ticket prices:
“In January, they raised their ticket prices again to $1.79 per TICKET (we charge $1.00 per transaction, which includes as many tickets as the buyer wants to buy) +PLUS+ 6.6% processing on the transaction (we charge 6%, and only 4.8% for event directors with more than 5,000 tickets).” – January, 2023.
At the end of 2023 they introduced Subscription Pricing on top of that! Even for free events. This was an effort to capture more advertising and marketing dollars.
In the past two years, they have increased the average Take Rate per ticket from $3.04 to $3.98. Largely without adding value, especially compared with alternatives in the market like TicketSignup and literally over a hundred other alternatives.
Guess what – customers were upset, and they are leaving. The number of tickets they sell on their platform is now over 20% lower than 2019, while RunSignup and TicketSignup are up over 60%.
They are gradually sanding down the customer leg of their three leg stool. Combined with the loss of employees, this is a very unstable company. Hence or reference to a train wreck.
Investors
Well, investors are also losing because it turns out that unbalanced companies are not good investments. So while the moves to lower employee costs and raise prices was meant to please Wall Street, they have made Eventbrite a bad investment.
In this recent Q2 Earnings call, they were again trying to placate investors with promises that their Marketplace would power them to success and they were going to respond to customers by creating a new free tier. But the moves seem more like they are to please Wall Street than shore up their real problems.
TicketSignup
RunSignup is fundamentally different than Eventbrite. The employees are the owners of the company. And we all know pleasing customers is how we progress. That means keeping our focus on continuing to release more features to help our customers grow their events, lower their costs and produce great events. And serving those customers by learning about them and helping them.