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Three Things I Learned In SaaS, Sports, Tech, and Live Events
The "Hospitality" Conundrum
The ticketing market has come a long way since I started at the LA Dodgers in 2001.
Back then, tickets were dramatically underpriced and sold to season ticket holders for teams and "insiders" (read: brokers) for major events.
In the mid-2000s, the NFL caught on to the price vs market disparity and created a program they called "On-Location," where consumers could buy tickets bundled with a room and hospitality for a price exponentially higher than face value.
Simply: They could charge the actual market price for the tickets and hide the difference in the package. Nobody could break out what costs what.
Since then, hospitality has exploded with private equity stroking huge checks to get in the game (Sixth Street & Legends, Arctos & Elevate, Endeavor-via-Bruin Capital & On-Location, Liberty and Quint, and so on).
Hospitality is now offered at nearly every major event and, for many, business in the hospitality game is booming. Revenues are setting records annually, though we don't know how profitable the business is as there are usually large upfronts paid for the right to sell hospitality exclusively.
Three things I've learned from being in/seeing all the hospitality over the past year at all the biggest events -
This week:
1. They're stealing from you. All of them. Be guarded about your tech, business model, and customers. We share examples and names of those who did it to us
2. "I don't give b--w jobs but I know when they're being done wrong" - Bill Maher. How his quote is applicable to the early days of a business
3. Why Scott Galloway's career advice is wrong - All-Star Game edition
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The unmitigated disaster that was the 2004 AEG Olympics.
Sometimes great people have terrible ideas.
In 2004, I worked at AEG as a sales person. AEG had just finished building the Home Depot Center (now Dignity Health Sports Park). It was a multi-use sports facility with a professional stadium for the LA Galaxy with training facilities for track, tennis, cycling, baseball, and more.
The AEG brass had a big idea: We could bring companies in for a team-building company Olympics. The market for such events was big and we could leverage the entire property for a daylong event. They laid out the plan and we, AEG's internal staff, were going to be the guinea pigs.
I can't properly relay how much of a disaster it was. -
Three Things I Learned in SaaS, Sports, Tech, & Live Events
I mentioned back in April that we had to take a hiatus until after Memorial Day "for reasons I'll share then."
Well, we were in court. In a jury trial for nearly a month. I'll be sharing a LOT about that experience after appeals. But for now:
Three things I learned about telling the truth during the most stressful month of my life:
1. You cannot hide who you are in court.
In a trial, everything is public. Much more than you might think, too. Your emails, slacks, instant messages, texts, and even your personal notes. This trial looked at everything that happened between 2010 and 2020—ten whole years.
Witness after witness got up there and tried to bend the truth. They'd be shown an email they wrote themselves and then try to explain why it "doesn't really say what it says."
Some were so absurd they'd claim entire sentences were "typos".
It would be silly if it weren't so tragic.
Tell the truth—all the time. You'll have nothing to hide when you end up on the stand, like I did for an entire day.
2. "He doesn't know what to do!"
Lying and deceiving are standard operating procedure for the vast majority of people. We sat and watched one person after another knowingly lie. They couldn't even look us in the eyes in the hallway.
But that can work to our advantage.
We only know the world we know. When they strategize, they think of what they'd do in certain situations, such as cross-examinations. What they'd say.
They read emails through their own corrupted lens. They can't fathom we'd actually get up and tell the truth.
My favorite moment of "The Miracle On Ice" is near the end of the game. The Soviet Union's coach doesn't pull his goalie. Coach Herb Brooks turns to Craig Patrick and gleefully shouts "He doesn't know what to do!"
He didn't know to pull his goalie as he'd never been in that situation.
We had a similar moment when their attorney was attacking me in cross-examination. I had to try to hide my smile. The truth was going to deliver us.
3. If you are inauthentic, people can see it. Even if you worry they can't.
We were so nervous. We knew we were telling the truth. We knew the evidence was clear. We knew who was being paid through "consulting agreements" to testify.
But we didn't know if the jury would see it.
They did. Our lawyers got to talk to them after the trial ended. 11-1 on all counts.
I wrote in April that it was Daniel's faith that got him thrown in the lion's den and only his faith could get him out.
I lost my father four days before I took the stand. He was the most honest man I've ever known. I watched people take advantage of his integrity time and time again my whole life. But he never wavered - he always did the right thing and told the truth. No matter the cost.
And when we needed it most, the truth was our most powerful weapon. -
Three Things I Learned in SaaS, Sports, Tech, & Live Events
1) You can compete without being enemies.
Competition is a part of life. If would be great if there was enough for everyone to be wildly successful, but we haven't figured that out yet, despite many wars.
When someone else is stiving for what we want, and there is a limited supply, the easiest thing to do is de-humanize the other person and make them "evil" or "bad." It's human nature and the default position of so many people. When 'that' kid is playing 'their' kid's spot, rivalries begin for no reason.
But it isn't necessary. One of my closest friends for the past 20+ years I met when we played the same position at USC. We competed every day. Another friend was a fifth year Senior at the same position when I was a freshman. I got playing time (he did too). Easy to see, though, that if I weren't there he'd have gotten more. I'm still friends with them both today and our families have become friends.
Just because someone sees the same opportunity you do, doesn't make them evil.
One caveat: Ryan and Trent are honest men who competed fairly. If others not competing fairly or legally, it's necessary to use the resources you have to defend yourself and those you're responsible to.
2. Nothing works harder than grateful
I'm often asked a great question at the end of the interview process. It's usually a version of: "What characteristics make people successful at TicketManager?"
I've spent a LOT of time considering the answer: People who want to be here.
Been doing this sixteen years - and led teams at StubHub and AEG as well. There are so many diverse characteristics which can be very successful. Everyone is so unique. But all super-successful hires share the one characteristic that they have a choice as to where they will work and they really want to be here. It's not just "a little bit better" for them than elsewhere.
If we can find that, we can build around it.
I love my job so much that when I hear others talk about theirs I immediately think "I need to go work even more" I'm so thankful for it.
3. Sometimes your faith will get you into an uncomfortable situation, and it's only that same faith that'll get you out.
Enjoyed a lesson on Daniel. His faith is what caused those around him turn on him and throw him in the lion's den to die. That same faith was the only thing that delivered him safely.
Keep the faith and do the right thing. No matter how hard it can be in the moment.
To that end, the Three Things will be taking a break until after Memorial Day for reasons I'll share then.
Say a prayer for the good in the world! -
Three Things I Learned in SaaS, Sports, Tech, & Live Events
Let's do a fun one this week:
The top sporting events I've been to as a result of my job.
1. The Greatest Game Ever Played: USC - Texas Rose Bowl 2006
2. The Helmet Catch
3. Kobe's Finale
4. Tiger Wood's One -Legged Major
5. Super Bowl LIV - Chiefs vs Niners
6. The Fastest Knock-out in UFC History
7. Bama- Clemson 1 - The 2016 Fiesta Bowl Shootout
8. World Heavyweight Title: Tyson Fury vs Deontay Wilder 1
9. Corey Seager's Heroics - 2023 World Series Win Amidst Loss
10. The Infamous Plaster-in-the-Gloves: Cotto vs. Margarito 1
11. * Jason Lezak’s comeback - The 2008 Beijing Olympic Games
Much more in the Substack about the experience along with some pictures.
Please excuse that we didn't have cameras on our phones until 2007, and even then they were pretty bad, so I don't have the best pics of each event.
Next time we see one another, I'd love to hear yours - along with a list of the top 5 in history you'd go to if you could -
Nearly everyone wants to be a leader.
We ask the same 11 questions in every final interview with our prospective teammates. When we ask where people think they want to be in ten years, nearly all candidates say they want to be leaders.
But the truth is, many actually want to do something other than the actual work of leadership. They want what many believe comes with being a leader: money, power, and prestige. But strip what society has adorned to leadership, and most people would choose another path.
Why? There are four things start-up leaders have to do that most people (really) don't want to do -
Three Things I Learned in SaaS, Sports, Tech, & Live Events
Super Bowl Edition: Week 2
Las Vegas' debut as a Super Bowl host was a wild success. It was easy to get around, there was an abundance of rooms and entertainment venues, and even the game was easy to get in and out of.
Three Things I Learned from the first Las Vegas Super Bowl:
1. Las Vegas will enter the new regular rotation.
In the old days, the Super Bowl regular rotation was (with number of Super Bowls hosted): Miami (11), Southern California (11), New Orleans (10), Tampa (5), Phoenix (4)
Recently, the NFL has awarded Super Bowls to the rotation cities and to cities with new stadiums. Las Vegas fell under the "new stadium" classification but, given the way the city hosted the game, the strength of the market, and the city's ability to handle inclement weather, there's no doubt Las Vegas will be in the rotation once a decade going forward.
From the looks of things, the rotation will be (from West to East): San Francisco, Southern California, Las Vegas, Phoenix, Houston, New Orleans, Atlanta, Tampa and Miami
2. I failed at my promise
The first years of TicketManager (then known as CEG and Spotlight) were very rough. We were broke, working every waking hour, and weary.
I played golf one day with a an older pseudo family member who was about to pull away from his business and enjoy retirement. I remember the conversation vividly. He felt so guilty doing the things he'd earned - like playing golf and working a (gasp) eight hour day for a change.
I was adamant in my response and feelings that I'd never feel guilty if we got through the dark times. And boy were they dark.
All weekend in Vegas my better half noticed I looked detached and like I wasn't enjoying the incredible access we had with customers and partners. I turned down dinner invites and passed on access and invitations to others. Truth is: I felt really guilty.
At our wind-down dinner on Sunday after the game, our VP Sales was clearly exhausted. I mentioned to my wife that "I hope he gets everything he deserves. He works so hard and cares so much." I hadn't seen him all week.
She stopped me in my tracks when she responded: "You do too. And don't forget it."
After dinner I was talking to an entrepreneur friend. I asked him if he was taking Monday off. "No" he responded "there's not point in it. It just delays the work I need to do anyways."
Me neither.
So many think being an entrepreneur ends with half-days and freedom.
It doesn't. Freedom has fangs. And the to-do list never stops. I thought I'd be able to enjoy the fruits at some point. I now know that's not part of the game…and I don't want it to be.
3. When we work the event, we aren't part of the event.
Last week I got to go to the Grammys, the Super Bowl, and the events around them. One thing stands out to me as strange: When the people who work the event post as if they're attending the event.
It's strange to me. We're the servants of the event. We weren't invited to have the fun. It happens at every Grammys and Super Bowl party. Very strange. -
Three Things I Learned In SaaS, Sports, Tech, & Live Events: On layoffs, cuts, and competition1. Surviving an attacking bear is a lot different than advancing a career. Growing up playing sports, there were always tryouts. And, unfortunately, there usually weren't enough spots for everyone. Usually, when someone doesn't make a team, get one of the promotions, or gets caught in downsizing, they focus on who they believe was the worst of those who did get the job."They took 12 players, and I'm better than the 11th and 12th" is a trap. There are often reasons those last two are in their spots. An example: When I played club volleyball growing up, we had a team with invitation-only tryouts during my junior year. Nike had pulled together the best local players and started a club with only one team in one age group to win gold in 1997. The coach, flying in weekly from Los Angeles, took ten kids. I was tenth.There were a lot of better players than me who complained, but I was taken as a project with potential. The following year, I was a starter. In my senior year, we took ten kids once again. One of them, my good friend to this day, played defense. We took him over a lot of outstanding players who could play multiple positions. They all whined, and still do, that they were "robbed by politics" and should have been on the team instead of him. They are wrong. He was a good player, and, more importantly, he was the absolute best teammate any of us ever had. He was a huge reason for all our success- which made him more valuable to our team than any of those other guys. When a sales team does layoffs, they often cut the "bottom 30%." Now, I'm not justifying layoffs at all. (We're guilty of it once - 13 people at the beginning of Covid, when live events went away for a year - done before PPP - and hired them all back within six months.) But nobody in the top 50% is concerned. The top half of the leaderboard is usually safe. We're not running from a bear. We need to be at the top of the pack. Trust me, I've been 10th out of 10. It's not a place anyone wants to be. 2. Cut to the clear line. I learned a similar lesson from my better half, who was a competitive cheerleader growing up at the highest levels. Her coach would say every year there was no roster size; they would "cut to the natural line," which I find to be terrific wisdom. When we set out to hire X number of people for a team, we sometimes don’t find enough talented people. But sometimes we find too many. I've found cheer coach advice perfect: Cut to the natural line. One of our best hires was an "extra" hire in 2013. She's on the executive team here today. 3. Sometimes it's just not personal. Everything is personal to us. It's who we are . But sometimes, there just isn't room and a decision has to be made. Sometimes, it's not because we're not good enough, it's because someone is a better fit for what they're looking for. I was told, in college, I didn't get an internship because I wasn't professional enough in how I spoke. Then I made a nice living in sales. I wish we lived in a world where we could hire everyone and everyone made the team. But sometimes, not making it is the best blessing.
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Three Things I Learned In SaaS, Sports, Tech & Live Events:
1. Do the thing at the start of the year, season, or quarter, not at the end.
We started TicketManager on Sept 27, 2007. End of a quarter and end of year
We raised one of our rounds on Nov 1. End of year in final quarter
It’s a really small thing, but we’ve had to explain it quite often when talking about YoY trends
It costs nothing to wait until the start of a new cycle, quarter, or year. There’s plenty to explain along the way. I don’t need something else.
2. The great RFP awakening.
2023 was a year of correction for SaaS businesses. Growth slowed for many, NRR dropped, Net Expansion went off a cliff (see chart), layoffs were rampant, FCF was king, and profitability mattered once again
But something else happened too:
Discipline in services returned.
growth-at-all-costs businesses learned that growth has a cost. And it changed customer expectations.
Customer after customer came to us looking to switch vendors. The problem, the deals they were offering were money losers. I saw it in so many businesses too, specifically SaaS, Agencies, and live events.
Investors were eating that loss in the name of future profits only they learned those profits weren’t coming.
Now those customers are wandering the market looking for someone to respond to their RFP terms.
Our answer has always been the same: No thanks. Suggest the same for you. Business is best when everyone is healthy. We're not going to pay $100 for something and sell it for $90.
3. Covid tried to kill the multi-year deal.
SaaS TCV bookings targets got smashed this year as customers felt burned being stuck in multi-year deals over Covid.
See #2 on this one. Don’t break the math. Do what will grow your business into a healthy vendor your customers can rely on. Let your competitors repeat the mistakes of the past. Once in a one year, companies don't go to multi year.
4. Stars like confetti.
I hope you had a terrific holiday.
The fallen world is built to tear down beauty.
But when God shows it in moments, in people, and in nature, man is it breathtaking.
As Rustin Cohle proclaimed when looking at the vastness of the dark night sky in True Detective: “Once there was only dark, if you ask me the light's winning”
Happy New Year.
#TeamLight
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