You guys are probably getting annoyed because we should get started. Huh?
No, I mean I think we have enough tape here of just breakfast sandwich conversation that that can be the episode.
Good. I hope you really go there.
Welcome to season 7, episode 2 of Acquired. I'm Ben Gilbert.
And we are your hosts. Today we come to you with the long overdue story of Eventbrite. We're joined by CEO Julia Hartz and her co-founder and husband Kevin. We'll discuss the founding, the IPO, and how they're managing through the pandemic. Also, we'll talk about Kevin's new SPAC. Now, a quick announcement: we have a new partner, Lorraa, an AI platform for legal teams. Well, David, I think it's time to dive in with Kevin and Julia on Eventbrite.
Indeed. And I don't think on this show have we ever had a company so tied in with the personal history of the founders. Before we talk about you guys together, let's talk about your backgrounds. Kevin, you're the more traditional Silicon Valley background, original PayPal Mafia member. How did you get into entrepreneurship with Connect Group?
Well, first, I want to give a shout out to Ben and David. The Pinterest breakdown was excellent. I'll talk about my background. I met Peter Thiel at Stanford, we were in student politics. Later, I invested in PayPal before launch. I had a quick flip with Connect Group, which was acquired, and that allowed me to invest in PayPal. My parents thought I was crazy.
We'll be done in four hours. I think maybe most interesting is you were part of that time at Stanford. What was that moment like?
I had the good fortune of meeting Peter Thiel and Keith Rao. We were involved in student politics. Peter is a brilliant non-conventional thinker. Later, we reconnected and he joined with Max Levchin, bringing in the UIUC mafia. I started at Silicon Graphics, which was like Google at its time. It gave me a view of the future. The PayPal diaspora was strong. I invested in PayPal pre-launch. They were working on mobile security for Palm Pilot, but found that infrared money transfer had to be done physically. They observed that accounts were based on email and spread to eBay. I met Peter at a restaurant called Hobe's for brunch.
And Kevin, when you say you were an investor pre-launch, how did that come to be? Did Peter bring you in?
I had a quick flip with Connect Group, providing internet access to hotels. We incorporated in April and were acquired in October. It wasn't life-changing but allowed me to invest. That was Connect Group, acquired by LodgeNet.
Weren't your parents upset that you took the earnings and put it all into an investment?
I'm sure they imagined I would use it for a down payment. It's important to do the opposite of what your parents say. They thought I was insane, even after we started Eventbrite.
I think that's a common theme among great founders. Parents often have a five-year lag on skepticism.
That's a great way to phrase it. Maybe it's a KPI: your parents are still disgusted and dismayed.
Wow. Bring us through selling a company to PayPal and then to starting Eventbrite, and then I want to get Julia's side.
Well, early on like Silicon Graphics, Julia was still in elementary school. She was a ballerina. I'd rather not do a side-by-side comparison.
She's always got to point that out.
And it gets smaller with every year.
Yeah, eventually someone will ask who is 10 years older and the agreement is that I can kill him.
All right, now that's recorded.
So there were ideas left on the cutting room floor at PayPal, including international money transfer and events. How did Zoom come out of your experience?
You've done your homework. Dave McClure joined David Sacks's group at PayPal. We discussed building an API, and we were the first developers on it. We kicked around ideas including ticketing, but honed in on money remittance to compete with Western Union. It was a missionary zeal to help immigrants send money home.
And so you started that on the PayPal API. Was it a separate company?
I was never part of the PayPal mafia. I turned down advances to join. When they opened the API, we incorporated and built the entity. Roelof and Peter agreed to fund us with $500k off the PayPal balance sheet, but after PayPal went public and was acquired by eBay, the deal was off. We launched, sending money to the Dominican Republic, and VCs thought we were crazy. Peter wrote our first check for $500k, and we bootstrapped. Roelof joined Sequoia and I think we were his first investment.
YouTube was either you or YouTube. So you're spinning up Zoom, and you go down to Santa Barbara for a wedding. What happens?
What happens at this wedding?
This is where I want to bring Julia into the story. Julia, take it forward from this wedding.
So, it was May 24th, 2003. My first boss at MTV was marrying Kevin's classmate. I ran into the church late, I was a reader. I sat on the edge, and a guy started talking to me. I thought he was probably married. After the reading, he said 'You did awesome, I'm so proud of you.' I thought I'd never see him again. At the reception, he showed up with a tray of drinks. I knew I'd see him again.
I'm a full-service investor. I'll bring founders drinks.
So Julia, you mentioned MTV. Let's talk about your background. You worked on Jackass. How did you end up with so much responsibility quickly?
I wouldn't overstate it. I got my foot in the door by interning during college. I had two paying jobs and a full-time internship. I went straight from graduation into an assistant role in series development at MTV. It was like being a VC for the network. I was an intern when the Jackass team sent their demo tape. It was pre-streaming, and disruption was coming from content. I was on the team that brought Real World and Road Rules. Jackass was different. We saw it from seed to IPO. The best parts were the weekly standards and practices calls. Now it seems tame compared to YouTube and TikTok.
This was pre-YouTube. Kevin showed me the first YouTube video, it was a cat at a zoo.
It was Jawed Karim in front of an elephant. I invested in YouTube early with Keith.
So on the back of this, you start dating after the wedding. You're thinking about coming back to the Bay Area. You get a job offer from Current TV. Were you going to take it?
Absolutely. Up until meeting Kevin, I was very linear. I was at FX Networks. But spending two years going back and forth between SF and LA showed me the differences between Silicon Valley and Hollywood. I learned from Kevin that you can create ideas and move quickly. I felt I was in the wrong industry. I got an offer from Current TV, but it was low. I paused to check with Kevin, and he seized the moment. Kevin, tell the story.
I sat next to Julia at the ceremony. She had beauty and poise and intelligence. Then I found out she worked on Jackass, and I knew it was a lifelong relationship.
So you were ready to write the term sheet.
I was ready to hand over that term sheet right there.
How long before you got engaged?
We met May 24, 2003, got engaged April 29, 2005, married June 3, 2006. I've given away every old password.
All right, we're talking about you two getting engaged. Can we stop talking about startup financing?
Kevin read me Pablo Neruda on a beach and proposed.
I love it. So I was referring to an offer to start a company, a counter offer to Current TV.
It's the job of a startup founder to find great talent. I was living with and engaged to this potential co-founder. I seized the opportunity to work together. We also had our third co-founder, Renaud Vis, the technical mastermind.
Still working at Eventbrite.
Absolutely. Just like you.
You took my job. I would have been still at Eventbrite had she not taken my CEO job. She kicked me up to chairman, where I have no idea what to do except sound important.
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Did you have the idea of ticketing from the PayPal API? Was it in your mind as you were thinking about this?
The thesis was that PayPal was a platform. We saw the broken ticketing industry. We wanted to build verticals on top of PayPal. I was once told, 'Why are you building pimples on the ass of PayPal?' But that's how industries start. Today PayPal does three-quarters of a trillion dollars in payments volume.
So Julia, in this moment where Kevin says no to the Current TV offer and says you should bet on yourself, was the idea there or did it come later?
It was there. We had talked about it. I would log into the customer support queue for the early product called Mollyguard. People were using it for free or small events. I started investigating who they were. I didn't know if I would make a great entrepreneur, but I love learning by doing. We found Renaud a couple months in. We moved into a phone closet in an old warehouse in Potrero Hill. We put saw horses and plywood desks. We moved quickly. I remember pushing a saw horse behind Kevin thinking, 'I hope he's not totally nuts.' But there was an overwhelming sense of optimism. Serial entrepreneurs are a little nuts. Kevin has an insatiable appetite for risk. We never looked back. A funny story: we were allowed to be in the building for free if we told other entrepreneurs about it. We collected 12 other startup teams in a year, including TripIt, Flixster, Trulia, Zynga, Boxee.
You found some pretty good ones, right?
We found some great ones. TripIt became part of Concur. Zynga was getting paid with checks through the mail. Andrew Trader was opening checks all day. Whenever you see that, invest in that company. There's a rumor that Don Valentine went to Cisco when it was just a husband and wife, and saw a fax machine with orders coming in. That's a clear investment thesis.
Okay, so you start all this. You would think you raised money from your network, but you didn't. You took a totally different path. You bootstrapped for two years. Why?
Zoom had been an exercise in dilution. We had to take a lot of capital, fight fraud, get remittance licenses. It was capital intensive. For Eventbrite, we wanted to polish the product. It didn't require a lot of infrastructure. For close to two years, we wanted to get product-market fit. Julia would respond to customers, I worked on product design, Renaud coded from Paris. We were a one-third remote team. We feel that's the right way to build a company. Capital can hinder companies by focusing on the wrong things. Also, nobody wanted to invest in us. They thought it was a strange business.
We use Eventbrite for all our acquired events. But at the time, people were collecting checks at the door for everything below arena size. How quickly did you identify that gap?
