The Exchanges

Q No, no, I didn't mean to cut you off. I was just going to try and get a sense of on the consumer side. Are these like college students or young professionals or like older folks going to festivals? How many, what are they spending per month on credits on average?

A So great, great commerce. Great question. So, um, I'll tell you both the pricing and then I'll tell you the target audience. So on the pricing side, we have packages that go from nine dollars a month to 29 dollars a month, 49, 79 and 99 dollars a month. So for each of those different price points, you get a certain amount of credits. Obviously, the more you commit to on a monthly basis, the cheaper per credit price you have. Therefore, you attend events more cheaply. Um, in the, uh, on the targeting side, um, when we think about we're, we're the only festival subscription service that's crossed the genre. So we have music and film and food and wine, tech and innovation. Eventually we'll have sports and other kind of concert events and other things. But, uh, when you have that cross section, um, we, we will eventually hit different target demos. Of course, millennials have tended to be, uh, the, the focus of our, of our, uh, go to market because of the fact that They'll spend more of their consumer dollars on experiential, uh, activities than they will on hard consumer goods. Um, seventy-five million millennials in America and North, and in North America as well, um, it's, that's the path that they choose to spend their discretionary dollars. However, when you think of food and wine, you think of something like South Beach or Aspen food and wine or Vail food and wine or New York…

AI assessment note: “I'll tell you both the pricing and then I'll tell you the target audience.”

Q dollar a month plan for six credits called a dollar 50 per credit. You get all the way up to scale at a hundred bucks a month or 99. It's basically a dollar per credit. Is that, do you think you're going to change that kind of arbitrage spread over time while your per credit pricing come down? Or is that really what you're going to stick with for awhile?

A Yeah, I think we'll stick with that. Um, from a business perspective, what gets really interesting about this whole credit model, and I'm still shocked that more marketplaces and subscription businesses haven't adopted it, and I give ClassPass a lot of credit for, for pioneering the way, is, uh, what it allows for is it really builds in a, a reverse dynamic pricing process. So we don't have to change the per month fee. We don't even have to change the per credit fee. What we can play with Is using data from hundreds of data points to be able to identify what is the credit cost of an event. So you, um, who might tend to go to music festivals at average 50 dollar per, you know, per festival, or, or use that example, you know, somebody else might, um, actually prefer food and wine festivals at a two dollar per ticket typical, uh, concept. I'll know over time, what is my lifetime value of you as a customer? I'll know Um, how much I want you engaged in, in the activity. And I may choose to offer the same event to you for slightly different in credit pricing than I might somebody else based upon all your behavioral aspects.

AI assessment note: “Yeah, I think we'll stick with that.”

Q the lawsuit. They can't, there's no, you have nothing to sue against anyway. But then if you send them an email and says, Hey, we've sold a hundred tickets to this random I heart event in Kentucky, you basically pre-buy the tickets yourself. And then you basically use your sales leverage to get them on the platform. That's a great way to like arbitrage this. Why haven't you done that?

A Yeah, so, so we have, um, but we haven't done it to the big players we actually want to work with, uh, uh, strategically. So, uh, I, I've known the IR folks for a long time, and I have a deep relationship with their corp, corp dev and venture group, so I just don't want to quote, unquote, piss them off. Um, we did, we did scrape about 8000 events that we actually have in our database, and, and we actually produce on our platform. Part of that was from an SEO play, um, and we also enable, if you look at the site, you'll see a lot of these Smaller events. Um, we just don't want to put the sales efforts into calling all these individual small events. So once they're listed on the platform, we actually have a CRM, uh, program, uh, that we're about to roll out where they'll receive an email from us, let them know the event is listed. They can go to the page on the platform, claim their event. And once they claim their event, they can sign an agreement to, uh, to actually abide by our terms. And then we'll list their product on the, uh, site for our consumers.

AI assessment note: “we haven't done it to the big players we actually want to work with”

Q Okay, cool. Now, how have you gotten the, it's, this is like the most beautiful step in any startup in my opinion, right? Or the first couple of months, you said you've gotten several thousand to just at least sign up and express some form of interest, even if they're not paying. What mousetrap have you used to get that sign of interest? Sure.

A Many. So, so we've started to test different marketing channels, right? So I come from a background where, um, understanding cost per acquisition and data metrics are super important to me. So we've been building kind of our network of media partners in order to engage in that. So we have some media partners that have tens of millions of emails that they're going to use on our behalf as we go into 2020 to engage on a local level to drive people. Um, we've begun testing a few different partner festivals where we said, come in and sign up for free. Um, and you know, you'll get a free ticket to a taco and tequila festival in Los Angeles. Um, so we're using some of our partners, uh, tools in order to drive interest initially.

AI assessment note: “testing a few different partner festivals where we said, come in and sign up”

Q Interesting. Yeah. Really interesting. Okay. Going to a flip side, how many, uh, organizations do you have, or sorry, how many events do you have committed to the platform?

A Yeah. So we have hundreds. Um, so there are some one-offs that have come on and want to be a part of it that we've put on. Um, but we're also right now we're, we're in deep talks with numerous of the, uh, big guys. Um, you know, I guess I could talk about strategic relationships, even though they're not finalized and closed, but, you know, we've been talking to iHeartRadio for, for, for months upon months and they, they run 20,000 events, uh, across, uh, across You know, different cities throughout the year. Um, we're working to get them on the platform. Town Square Media runs hundreds of events. We're looking to get them on the platform. We're working on partnerships with other ticketing companies that already have tens of thousands of events to make their events available on our platform. So we're very quickly within, within this next quarter in 2020, there'll be thousands of events, and that's when we'll really kick in the marketing efforts to, to drive people, just like any marketplace. Nobody wants to sign up unless there's a lot of, uh, product.

AI assessment note: “So we have hundreds. Um, so there are some one-offs”

Q Okay, uh, what do you do for the festival organization?

A Um, so for them, uh, it's a, it's a couple pieces to it. The number one piece is additional distribution. So the ability to, uh, allow our members to be able to attend their events is, is the first. The second, uh, coming from a very stringent, stringent is the wrong word, very robust data background. Um, I, I really understand the whole consumer data play, especially in the entertainment space. And, uh, what I find is outside of the very big players in the live event space, the live nations of the world and a few others, um, data is, is a little disparate. Um, only one in 10, uh, in venues, most venues, they only know one in 10 people in the audience.

AI assessment note: “The number one piece is additional distribution. So the ability to, uh, allow our members”