20VC Why Every Startup Will Either Fail or Rebrand, How To Do OKRs The Right Way & How To Know The Reversible From the Irreversible Mistakes with Jack Groetzinger, Founder & CEO @ SeatGeek

In this episode of "20 minutes VC," host Harry Stebbings interviews Jack Gretzinger, founder and CEO of SeatGeek, a leading ticket platform. Jack shares his entrepreneurial journey, starting with his ticket resale ventures during Boston's sports peak, to creating SeatGeek, which has raised over $160 million in VC funding. He emphasizes the importance of a technical founding team, learning commercial skills on the go, and the challenges of hiring, particularly for engineers. Jack also reflects on the necessity of rebranding, the strategic use of OKRs for company alignment, and the significance of culture in scaling a business. The discussion also covers the calculated risk of acquiring Toptix, the impact of location on building a tech firm, and the role of luck in startup success. Jack's vision for SeatGeek is to revolutionize ticket distribution, enabling more live experiences through a modern, API-driven model.

• Harry Stebbings is the host of the 20 Minute VC podcast, featuring founders and venture capitalists.
• Harry invites listeners to engage with him on Instagram to view upcoming guests and suggest questions.
• The episode features Jack Groetzinger, CEO of SeatGeek.

"Hello and welcome back to the 20 minutes VC and a very special founders Friday with me, Harry Stebbings."

This quote is Harry Stebbings introducing the podcast episode and encouraging listener interaction on Instagram.

• Jack Groetzinger founded SeatGeek, a large ticket inventory platform.
• SeatGeek serves numerous artists, teams, and venues.
• Jack has raised significant VC funding and previously founded Scribnia, later sold to an ad network.
• He is also a founder partner at Founder Collective and an angel investor in Troops Inc.

"Now Jack is the founder and CEO at Seatgeek, the world's largest ticket inventory on the web, serving more than 500,000 artists and teams in over 380,000 venues."

The quote summarizes Jack Groetzinger's current role at SeatGeek and the scale of the platform.

• High Five is recognized by Fast Company for innovation.
• The platform offers cloud software and meeting room hardware for business collaboration.
• High Five aims to simplify video and audio conferencing with easy-to-use features.

"Recently named one of Fast Company's most innovative companies of 2018, high five simplifies business collaboration with a conferencing platform that builds connected cultures."

This quote highlights High Five's conferencing platform and its recognition for innovation.

• Culture Amp provides a platform for employee feedback management.
• It supports onboarding surveys, companywide engagement, individual effectiveness, and more.
• Companies like Slack, Nike, Oracle, and Lyft use Culture Amp.

"Culture amp is the platform that makes it easy to collect, understand and act on employee feedback."

The quote explains the purpose and benefits of using Culture Amp's platform for managing employee feedback.

• Jack Groetzinger's interest in startups began with buying and selling sports tickets in Boston.
• He recognized inefficiencies in the ticket market and aimed to create a Bloomberg terminal for tickets.
• User feedback led to the evolution of SeatGeek into an aggregator of tickets to help users find the best value.

"We began to scrape a bunch of ticket data because we thought it might be an interesting market."

This quote details the early stages of Jack Groetzinger's journey into the ticket market and the data scraping that led to the creation of SeatGeek.

• Jack believes technical skills are crucial for startup success.
• Business skills are seen as learnable, unlike technical skills which require concerted effort.
• The best founding teams are technically adept and can learn commercial aspects as the startup grows.

"I think for anyone founding a startup, being technical is far and away most important criterion that sort of drives success."

The quote emphasizes the importance Jack places on technical skills for founding a successful startup.

• Jack reflects on the challenges of learning commercial skills.
• He advises founders to be aware of areas where they may lack knowledge.
• Jack regrets delaying the hiring of a full-time finance person, which he sees as a learning experience.

"God knows I may look back sometimes at old emails and just cackle at myself."

This quote shows Jack's self-awareness and ability to learn from past mistakes regarding the commercial side of business.

• Jack appreciates the non-authoritarian approach of his board members.
• He sees the relationship with board members as a long-term commitment.
• Jack feels fortunate to have a supportive board that contributes positively to SeatGeek's success.

"It just feels like a bunch of smart people in a room who all want to make the same company successful."

The quote reflects Jack's positive experience with his board, highlighting the collaborative nature of their relationship.## OKRs (Objectives and Key Results)

• OKRs are a framework for company alignment and progression.
• They were pioneered by Andy Grove and popularized by Google.
• OKRs help maintain alignment and efficiency as companies scale from small teams to larger organizations.
• They address the diminishing marginal returns of adding new employees.
• Properly set OKRs allow individual autonomy while ensuring collective direction towards common goals.
• A balance between individual initiative and collective effort is achieved through OKRs.

"OKRs are sort of this alignment framework that was pioneered by Andy Grove and then really made popular by Google."

This quote explains the origin of OKRs and highlights their significance in company alignment and progression.

"I see OKRs as really a way of addressing that problem so that you can get everyone aligned on the same page and then let them go individually, do great work without being constrained."

This quote emphasizes the role of OKRs in balancing individual autonomy with organizational alignment, ensuring that all employees contribute effectively towards common objectives.

• Company culture can fragment as companies grow and individuals may not know everyone.
• Inflection points often occur around mid one hundred employees.
• Teams become the new unit of support as companies grow.
• Maintaining alignment and a cohesive culture is essential during scaling.

"I think the classic answer would be around mid one hundred s to reach that point where not everyone knows each other anymore."

This quote identifies a common scaling milestone where company culture begins to change due to the increasing number of employees.

"Individual teams almost begin to operate at sort of the unit level that the company did before."

This quote explains how smaller teams within a growing company can maintain a sense of community and support, mirroring the earlier stages of the company culture.

• Creating a culture of ambition involves setting challenging OKRs.
• Aiming for a 70% accomplishment rate is ideal for OKRs.
• Setting aggressive goals is encouraged, but outcomes should be assessed in aggregate to avoid penalizing exceptional individual performance.
• Overcommunication is key to managing expectations and performance regarding OKRs.

"If you're doing it right, then on average you're averaging about 70% accomplishment as a company."

This quote suggests that not fully achieving OKRs is acceptable and part of setting ambitious goals.

"You can't just look at one person's okrs for one quarter and say, well, you got 100%. Clearly you didn't try hard enough."

This quote cautions against judging individual performance solely on OKR completion rates, acknowledging that exceptional work can lead to full achievement of OKRs.

• Hiring is a significant and time-consuming task in building a company.
• There is no single solution to hiring effectively; it requires hard work and dedication.
• A structured and data-driven approach to hiring is crucial.
• Building a strong employer brand is important for attracting talent.

"There's no one weird trick you can do to hire really effectively. It's just a ton of sweat and a ton of work and a ton of hours."

This quote dispels the myth of a simple solution to hiring, emphasizing the effort required.

"We treat it sort of like a web funnel, where at each stage of the funnel, looking at the quality of people we're talking to and how quickly we're moving them through."

This quote explains the systematic and analytical approach to hiring, likening it to a marketing funnel.

• Employer branding is often overlooked but can have significant impact.
• Blogging and open sourcing software can build a differentiated employer brand.
• A strong employer brand can attract applicants and lead to referrals.

"People tend to be a little bit myopic and not invest in sort of employer brand building stuff that can actually be really impactful."

This quote highlights the common oversight of investing in employer branding and its potential benefits.

"We get a ton of engineering applicants who will specifically reference having checked out our open source work when they're interviewing with us."

This quote provides evidence of the positive effects of employer branding on attracting talent.

• Financing is crucial for hiring top talent, especially engineers.
• Different stages of funding require different focuses, from founder and idea at early stages to strong customer acquisition metrics at later stages.
• Acquisition of new companies can be a strategic move facilitated by funding.

"We've done sort of two larger growth rounds that were really very oriented around customer acquisition and having strong CAC to LTV math."

This quote describes the focus on customer acquisition costs and lifetime value during later funding rounds.

"We acquired a company called Toptix for $56 million last year, and we raised around, it was almost exactly that amount to finance the deal."

This quote illustrates the strategic use of funding for growth through acquisitions.

• Repeat usage is key to competing with incumbents in customer acquisition.
• Competitors may have higher per-sale earnings, but a differentiated product experience can lead to customer loyalty.
• Creating a product that customers want to return to is essential for sustainable growth.

"Our competitors make a bit more than us per sale that they transact... where we hopefully have an advantage as around creating a differentiated product experience that people want to come back to many times over."

This quote discusses the strategy of focusing on repeat usage and product differentiation to compete in the market despite competitors' higher per-sale earnings.## Customer Acquisition Strategy

• Competitors often focus on single transactions, whereas the goal is to acquire a user who will engage repeatedly and become a lifetime user of CEK.
• The importance of buying a user for life, not just a single transaction.

"So whereas competitors might be buying a single transaction, we hope to buy a user that is repeating many times over and is using CEK for life."

This quote emphasizes the long-term strategy of customer retention over one-time sales, suggesting a focus on building lasting customer relationships.

• Customer acquisition channels can become less effective over time due to various factors like pricing and competition.
• The necessity of diversifying customer acquisition channels to maintain scalability.
• The dynamic nature of acquisition channels, with some becoming less significant over time as new ones emerge.

"The other element that I always think also is kind of the mortality of customer acquisition channels and how absolutely you can achieve repeatability in the Cat twelve tv stakes, but then for some reason it tails off."

The quote discusses the concept of 'mortality' in customer acquisition channels, acknowledging that channels may lose effectiveness, necessitating a strategy that allows for repeatability and diversification.

• Empathy is considered a valuable trait for investors by many founders.
• However, having hyper-intelligent board members who think about the business frequently can be more valuable.
• The board's advice is crucial during major strategic moments which can shape the company.

"Yeah, empathy matters. I would say even more than that. What I value most from the guys in our board is just having hyper intelligent people who are thinking about your business a lot."

The quote suggests that while empathy is important, the speaker values the intelligence and engagement of board members more, especially during critical strategic decisions.

• The importance of recognizing reversible versus irreversible mistakes in board decisions.
• The speaker has experienced minimal serious board friction due to a collaborative approach to decision-making.
• The strategy of discussing topics collaboratively until a consensus is reached, rather than taking a unilateral approach.

"We've been lucky in that we've said, honestly, I can think of no moments of sort of serious board friction where people were meeting played odds."

This quote reflects on the speaker's experience with the board, highlighting the absence of serious friction due to a collaborative decision-making process.

• New York's tech ecosystem is smaller and tighter than San Francisco's, offering a chance to build a differentiated brand.
• The smaller talent pool in New York and fewer liquidity events pose challenges to growth and recruitment.

"The challenge, of course, at the flip side of that is just the total pool of people is smaller."

The quote addresses the challenge of a smaller talent pool in New York compared to tech hubs like San Francisco, which can impact the growth of a tech firm.

• The challenge in hiring data scientists lies in distinguishing serious quantitative professionals from those with less experience.
• Preference for hiring career quantitative professionals over those with less formal training.

"The biggest challenge sort of sorting through the data science pool is filtering the people who are sort of very serious quantitative professionals versus folks who did a boot camp for three months and are now trying to become a data scientist."

This quote discusses the difficulty in identifying highly qualified data science professionals amongst a large number of applicants with varying levels of experience and training.

• The speaker did not initially aspire to lead a major M&A event.
• The acquisition of Toptix was driven by a successful licensing partnership and perceived synergies.
• Cultural integration and risk management were key concerns during the acquisition process.
• The acquisition nearly doubled the company in size and required significant integration efforts.

"We at the time were about 140 folks. Tops at the time was about 110. So it's nearly doubling the company in size and also geographically meant a lot of expansion for us."

The quote highlights the significant impact of the Toptix acquisition on the company's size and geographic reach, emphasizing the scale of the integration challenge.

• Emphasizing the importance of integrating systems and encouraging culture sharing post-acquisition.
• The role of luck in cultural compatibility between merging companies.

"We also overinvested, perhaps in just flying people across offices, forcing, or at least strongly suggesting a lot of culture sharing."

This quote suggests that proactive measures were taken to integrate the cultures of the two companies post-acquisition, recognizing the importance of cultural cohesion.

• The speaker reflects on being more aggressive with growth and user acquisition in hindsight.
• Waiting for strong evidence of favorable CAC (Customer Acquisition Cost) to LTV (Lifetime Value) ratios before raising more money was seen as cautious.
• The benefit of hindsight suggests a more proactive approach to growth could have been beneficial.

"I think I would have know sort of even more aggressive when it came to growth and user acquisition and building the brand."

The quote reveals a retrospective desire to have pursued a more aggressive growth and branding strategy, indicating a lesson learned about the timing and assertiveness of scaling efforts.## Secular Trends and Competitive Growth

• Recognizing secular trends such as the rise of mobile technology can provide a competitive edge.
• Being more aggressive with growth early on could have capitalized on these trends.

I realized that there were a lot of secular trends, most notably mobile, that were really converging in our favor, and that we could get an even bigger leap on the competition if we've been a bit more aggressive with growth early on.

The quote emphasizes the importance of acknowledging and utilizing secular trends to outpace competitors. The speaker reflects on the missed opportunity to be more aggressive in growth strategies to leverage these trends.

• Jack recommends "Powerful" by Patty McCord, which explores the HR philosophy at Netflix.
• The book provides detailed insights into the Netflix culture and operational strategies.

So I'm not sure it's my favorite of all time, but I'm reading a great book right now, which is called powerful by Patty McCord.

Jack shares his current reading choice, highlighting its relevance to understanding Netflix's successful HR practices, which he admires.

• Early-stage startups often neglect branding, which can become a limitation as the company grows.
• Rebranding is seen as an inevitable step for consumer web startups to enhance marketing effectiveness.
• The timing of a rebrand is based on the brand's impact on growth, either as an inhibitor or an accelerant.

It's such a typical cycle where early on you're starting a consumer company, you don't make a big investment in brand because it would be responsible to do so.

The quote discusses the common trajectory of startups underinvesting in branding initially and the eventual need to rebrand as the company scales.

• Anecdotes shared with reporters can persist in public memory.
• Jack's mention of his diet and sleeping habits serves as a cautionary tale about public disclosures.

Yeah, that's a great example of why you should never tell a reporter anything you don't want people to repeat, ever.

Jack reflects on the lasting impact of sharing personal routines with the media, suggesting discretion in what is shared publicly.

• Jack views competition not as other companies but as obstacles to achieving the company's vision.
• The focus is on changing the industry infrastructure rather than taking market share from competitors.
• Innovations like a new product for ticket distribution are aimed at transforming the ticketing market.

We don't see our competition as some of the obvious companies in our space, but rather the thing which is preventing us from getting to where we want to be.

The quote outlines Jack's perspective on competition, emphasizing strategic innovation over direct rivalry with other companies.

• Starting a company post-college is not considered the biggest risk by Jack.
• The merger with Top Ticks is highlighted as a significant risk due to cultural integration and operational uncertainties.

The merger we did with top ticks last year was a huge risk because we felt this thing that we loved dearly and our souls, this company and all the people within it.

Jack identifies the merger as the most substantial risk taken, indicating the emotional and strategic stakes involved in such a decision.

• The impact of luck on startup success is often underestimated.
• Even exceptional founders face a high probability of failure in the startup world.

I think there's this huge underappreciation of the element of luck in doing startups.

The quote challenges the notion of meritocracy in startups, acknowledging the significant role of luck in achieving success.

• The aim is to enable new live experiences by modernizing ticket distribution.
• The focus is on creating a more accessible and efficient ticketing system through technology.

Our goal is, like I was talking about earlier, it's not to take share from our competitors, it's to enable new live experiences.

Jack describes SeatGeek's mission to revolutionize the live entertainment industry by improving how tickets are bought and distributed.

• Thanks are given to guests and partners who contributed to the podcast.
• The role of collaboration platforms like High Five and Culture Amp in business and culture is highlighted.

What a fantastic guest Jack was to have on the show. And a huge thanks to him for giving up the time today. And to John at Excel and David and Michael at founder Collective for the fantastic questions.

This concluding statement expresses gratitude to Jack and the partners for their contributions, emphasizing the importance of collaboration and support in the podcast's success.