Goldstar, now the fifth biggest ticket seller in America, started during a carpool.

In 2001, Rich Webster, Jim McCarthy, and Robert Graff were working together at a start-up called Kiko. “We lived near each other and worked about 20 miles away from work, so we car-pooled,” says Graff. “That start-up was a classic dot-com bubble flame-out. We raised and spent more than 10 million dollars in VC money, ‘pivoted’ every time an investor had a ‘big’ idea, and never launched a product. I think at one point there were 80 employees and 0 customers.”

Meanwhile, Graff was helping out a friend at a different company that was also headed downhill. That company did online “papering” (i.e. giving tickets away for free to fill a venue). During one of their commutes, McCarthy and Graff started talking about the flaw in the ticketing business. “No venue wants to be told that their product is worthless, and no customer wants to go see a show that’s unsellable,” explains Graff. “So we had an idea. We’d do the same thing, but we’d target the best entertainment. The most popular shows have unsold inventory too, and instead of charging the venue to give it away, we’d sell half-price tickets online and actually pay the venue. In October of 2001, we agreed to do it. The website launched in February.”

After leaving a start-up that blew millions of dollars without ever accomplishing anything (Graff: “too many angels and VCs calling the shots and no real focus on the product”), the founders worked hard to avoid funding on their new project. “We purposefully didn’t want anyone else’s money because we didn’t want their advice. We started with $1,000 and immediately paid $800 to the state,” Graff says.

“We purposefully didn’t want anyone else’s money because we didn’t want their advice.”

He did the product development, programming and sys admin. McCarthy did the marketing and customer service. Webster did the venue outreach. The workload split worked well. Graff (right) says, “Luckily, the three of us have very different skill sets and, combined, we had almost all the skills we needed — except design. For that we called upon a friend to do us a favor, and when the business started to look real, we gave him equity.”

For almost the first year, the company was just the three founders. “We worked from our homes and got together a few times a week,” says Graff. “We then got a tiny office with three desks so we could work together. Now with 50 employees, about half our staff works in our office and the other half from home.”

A different approach to tickets
Goldstar’s approach contrasts with other ticket sellers. Conventional brokers buy high-demand tickets and sell them at a premium, sites like stubhub.com let people sell tickets at market prices, eBay lets them auction to the highest bidder.

Goldstar, on the other hand, goes after leftover seats – to sports, theater, concerts, comedy, and more – and sells them at half-price. Venues cover costs and use the unsold inventory as a marketing tool to reach new audience. Customers get to try new things without the risk of paying full price. Graff says, “When we get people to go out and see a show or band they wouldn’t normally have gone to, it’s a win — a win for us, for our member, and for our venue.”

According to Graff, the company sold almost $40 million in tickets last year and has about 1.5 million customers. It’s partnered with MLB, Cirque du Soleil, NBA, Broadway, the Improv clubs, Ticketmaster, Live Nation, and more than 5,000 other venues and ticket suppliers across the country. It’s grown 40-50% annually for the last several years and expects to match or beat that this year too. The company also plans on adding about a dozen markets this year and is constantly acquiring new partners.

The founders have no interest in exiting either. Graff says, “There’s really no planned ‘end’ for something like this, unless you’re explicitly planning to sell. And while we do get inquiries about that, nothing so far has seemed to make sense compared to just continuing to build the business.”

Continued…

Customers want to actually use a tool before giving up their info. So it’s interesting to see more and more sites letting you do the thing first and moving to collect your info later (or not bothering at all)...

Optimizely
Optimizely bills itself as “A/B testing you’ll actually use.” The big call to action on the home page is a field to enter your website URL.

That takes you to a page where you can start annotating your website in order to set up your A/B test.

When you click save, that’s when the site prompts you to create an account.

Give the OK
Give the OK is an online feedback and approval tool. The home page offers a big “upload your first proof” button.

The resulting page gives you a link to share with your client. And that’s when the site encourages you to sign up for an account to track further iterations.

If you want to track further design iterations and harness the true power of Give The Ok, sign up using the form below.

Continued…

Experts go with what they know. And they’ll often insist something needs to take a long time. But when you don’t have tons of resources, you need to ask if there’s a simpler, judo way to get the impact you desire. Sometimes there’s a better way than the “best” way.

I thought of this while watching “The Fighter” over the weekend. There’s a making of extra on the DVD where Mark Wahlberg, who starred in and produced the film, talks about how all the fight scenes were filmed with an actual HBO fight crew. He mentions that going this route allowed them to shoot these scenes in a fraction of the time it usually takes.

Every filmmaker that we talked to about directing this movie was like you can’t shoot the fights in 20 days, you need 35 days. And I said, “Well, we’re going to shoot the whole movie in 33 days and we’re going to shoot all the fights in three days.” And they said, “How are you going to do that? It’s never going to work.” And I said, “Because we’re going to film them like actual fights.”

So we literally did every fight from the actual beginning, coming out of the dressing room into the arena, into the ring, first bell, introductions, to the last bell, and everything. And we just did it over and over and over again.

And what I kept telling everybody is that HBO does it in one take and they don’t know what’s going to happen and they never miss a thing. We have the luxury of showing them what we’re going to do in the morning before we shoot it and doing it over and over and over again. So why do you need 20 days? For what? To jerk each other off? To touch up your makeup? To go in the trailer and take a nap?

We’re not talking about putting the camera in there and saying, “OK, we’re going to do a stunt punch here.” No, we’re going in there and beat the shit out of each other and we’re going to make it real.

Judging by the film’s success at The Oscars and the box office, the plan worked. And it’s a great example of reframing the problem and asking the right questions.

All these filmmakers insisted on a month+ to film the scenes because conventional wisdom says that’s the “right” way to do it. But sometimes conventional wisdom is more convention, less wisdom. And that’s when it pays off to take a questioning attitude and challenge assumptions.

Would taking the extra time with these scenes really add significant value? Sure, there’d be more slow motion, spit-flying, macro closeups. But would those shots really have made it a better film?

It ties in with another great question to ask: What problem are you solving? The goal was to make the fights seem real. Not to make them look good. To seem real. Focusing on that changes the requirements.

And that leads to another good question you should always come back to: Is there an easier way? The HBO fight crew is made up of experts at filming fights. They don’t need to be taught how to make it look real. They’re used to capturing a fight in one take — and that’s without knowing what will happen beforehand. Shooting this way is a piece of cake for them.

And maybe the most important question: What’s the opportunity cost? The whole film had a shooting calendar of 33 days. Filming it the HBO way means the movie gets made. A longer, pricier approach might have doomed the film and prevented it from ever being shot in the first place.

Most of us aren’t filming fight scenes. But the way Wahlberg and his team challenged assumptions and questioned traditional “best practices” is something that can be applied to all kinds of arenas, not just boxing ones.

Below: (Spoiler Alert! Don’t watch if you don’t want to know the outcome of a fight in the film.) This video compares Micky Ward vs. Shea Neary in “The Fighter” with the real fight.

Back in 2001, Coudal Partners was on the ropes fiscally. And according to Jim Coudal, it’s the best thing that could have happened.

"After 9/11, we lost a lot of business. And we were in trouble. It wasn’t any problem of ours. One company got bought and other people cut back on their spending," he explains. "It’s the best thing that ever happened to us because we pulled back and said, ‘Well, do we wanna build up this whole thing again and go chase business that we don’t want and get into pitches and win or not win business based on the whims of people who are stupider than we are? Or is there another way?’"

It was the culmination of years of frustration from doing client work. "We never really maximized our creative potential by, I can say it, whoring ourselves out to people who knew less than we did," he says. "If you have the skills to do client work, you have the skills to make your own product. You’re selling yourself short by selling that on a work for hire basis."

To illustrate his point, he brings up the product that now generates the most revenue for the company: Field Notes. "We do a good job marketing it," he explains. "We sell hundreds of thousands of these things and we make money out of it. If I did that same work for this other company called Yard Notes and we did exactly the same work, they’d paid us $50,000 for the work and then sell a million of the memo books. We didn’t get any of that million that our work did. From an economic standpoint, that’s the essential inequality. Your own stuff is potentially more lucrative and also comes with peace of mind — and not having those ulcers that come with knowing full well that you know better than the client but still have to kneel down."

Evolving goals
Coudal started out decades ago as a creative director for a big Chicago ad agency working on high profile accounts. But even then, he wasn’t happy with the system. He’d reach goals he set for himself yet still found himself dissatisfied.

"There’s this great quote by Dan Gilbert. He said that the reason that most of us are so unhappy most of the time is that we make our goals for the people we are when we set them, not for the people we’re gonna be when we reach them," Coudal explains. “And when I started at an ad agency I said, ‘I need to be a creative director. I need to be a hotshot creative director in an agency that’s highly visible.’ And I got there and was miserable doing work I wasn’t particularly proud of for people I didn’t like."

That’s when he left and, along with partners Susan Everett and Kevin Guilfoile, started a new eponymous agency. Despite the new company, the result was a familiar feeling. He says, "I wanted to bill $20 million and win some Addy Awards. That’s what we wanted to do. So we just kept pushing. And then adding people and growing and working for clients and we never evaluated whether this is really what we wanted to do. We were just trying to get to this arbitrary goal for no reason at all.

"I had set goals early without reevaluating where I was in terms of my happiness as a person. And I had to feed the beast. If you start adding people, then you gotta bring in more work and sometimes you gotta bring in work that you’re not particularly fond of in order to make the payroll to pay the more people that you’re hiring to do the work that you’re not particularly fond of.

“I had set goals early without reevaluating where I was in terms of my happiness as a person. And I had to feed the beast.”

"One thing leads to another and all of a sudden you look at the work you’re producing and you’re not proud of it and you’re out at the bar after work making fun of your clients. That’s funny for a little while, but that’s no way to go through life. It makes you jaded. If you don’t like your job, there’s something wrong. And going to the bar and complaining about your job is a symptom of something wrong.”

Continued…

It takes 77 steps to make an Emeco 1006 chair. It’s made from 12 different sections by 50 people and they need 8 hours to do it. At each step along the way, the chair is ground to smooth out the welds and create a seamless look. The end product is nearly indestructible and built to last for 150 years.

Once found on destroyers and submarines in the 1940s, this article in Metropolis talks about how the chair has become a favorite of designers. In fact, Philipe Starck agreed to offer updated designs for no fee.

“I was worried that Philippe would want a huge fee to design for us, but he didn’t even discuss money until I told him that I couldn’t afford to pay him anything. I offered him a stake in the company. He said he didn’t want one.” Instead Emeco will pay Starck an undisclosed royalty. “He could’ve taken his designs to Steelcase and made a big, fat fee.”

Starck chose to design for Emeco for a simple reason. “I have always admired the way the Emeco chair is put together,” he says. “I thought if I could design a line of furniture that becomes a classic like that chair, then I would be doing something great. I have designed a great number of things I am not proud of, and they are no longer around. I want to design things that are here forever. I think it’s time to stop wasting what’s on the planet.”

There’s more on the Starck collaboration at the Emeco site. He writes, “It is a chair you never own, you just use it for a while until it is the next person’s turn. A great chair never should have to be recycled. This is good consideration of nature and mankind.”

The site also offers a neat documentary on the company and its design process. It talks about the “ping ponging” between designers and manufacturers and how the company builds dozens of actual chairs as prototypes before finalizing a design. One designer says, “Sometimes you don’t get around to doing the final drawings. Sometimes the chair is the drawing.”

Also revealed in the doc (though perhaps just legend): The 1006’s seat was molded after Betty Grable’s bottom.

Going back to the Metropolis article, it mentions seven ads Emeco ran in Fortune back in the 1950s.

Each one depicted a different sculpture by Rodin; above the bronzes, in large letters, the ads read: “Sculpted Masterworks.” The name Emeco was in small letters at the bottom. “A lot of people called, asking, “What do you make?’” recalls Emeco’s chief operating officer at the time.

Sounds like a forerunner to Apple’s Think Different campaign.

Inventables, “the innovators hardware store,” specializes in materials that designers, artists, and inventors use to develop new products and make new things. The site is filled with neat stuff but faces a tough challenge: selling things that people have never seen before and don’t know they want/need. The site responds by diving deeper with product descriptions, photography, sample usage, etc. Here’s the product page for Hand Moldable Plastic at Inventables:

It’s interesting to see how this page differs from other sites that sell moldable plastic. Elsewhere, you just see a picture of the product in a jar. Inventables shows it in use by human hands.

Elsewhere, it’s called simply “Moldable Plastic.” Inventables adds a helpful descriptor, calling it “Hand Moldable Plastic: Low temperature plastic useful for hand-molding prototypes.”

Elsewhere, the only specs listed are the size of the jar it comes in: “3.5×3.5×3.8 inches; 13.8 ounces.” Inventables gives you stats on the actual substance, including Crystallisation Temperature, Viscosity, Melt Flow Index (whatever that is).

That level of detail, combined with a curated product mix, is how the site competes with bigger retailers. According to Zach Kaplan (right), CEO of Inventables, the goal is to inspire customers. “Part of making it accessible is making it inspiring. It has to have that design aspect to it,” says Kaplan. “Otherwise it looks like any other retail site and we’re just selling a jar of resin pellets.”

Since it’s selling a world of foreign objects, an environment tailored to discovery is key for the site. Kaplan says, “If you know what you want, then yes, you can go to Amazon and type it in and get to it. But if you don’t know what you want, that jar is not helping you.”

That’s why you get things like scientific specs and in-use photography at the site. “Our pictures are very expensive,” explains Kaplan. “I guarantee you we’re paying a lot more for pictures than other sites are paying. We’re trying to ignite your imagination. And to make you think, ‘What could I do with this?’ At other places, it’s more of a catalog than a place to go explore.”

Inventables also gives examples of how others are using each product in order to spark ideas. For example, the Applications section for Temperature-Sensitive Glass (below) shows how people have used it in shower installations and interior design. The Details section explains what’s unique about the product, why it’s better than alternatives, and more.

It’s a good lesson for anyone who’s trying to compete with bigger competitors. If you’ve got a smaller product mix, you can obsess over these details in a way that big guys can’t. Customers respond to that.

Continued…

“If you’re still pursuing an online business strategy aimed at building impressions, you’re not going to make enough money,” says Dallas Morning News publisher and CEO Jim Moroney. That’s why the paper started a digital paywall.

And it’s why the NY Times is limiting non-subscribers to 20 free articles at its site each month and rolling out digital subscriptions for those who want unlimited access.

That follows News International’s move last year to charge for access to the online sites for Britain’s The Times and Sunday Times. Rebekah Brooks of News International said the decision to charge came “at a defining moment for journalism… We are proud of our journalism and unashamed to say that we believe it has value.”

Different paths to profit
Even if you’re not in the media game, its fascinating to watch these companies put a value on their efforts and move away from relying on ad sales. After all, getting customers to put money where their eyes are is the challenge for many tech companies too.

There are different – and sometimes conflicting – paths to success for publications. Cook’s Illustrated is doing great by taking no ads, charging for access to its recipes online, and staying away from food fashion. Consumer Reports gets taken seriously because of its clearly defined mission, extensive lab testing, and trustworthiness. By offering specialized business content, the Wall Street Journal has one of the most successful paid-for sites with about 407,000 electronic subscribers.

The New Yorker puts investigations of national security on the cover instead of celebs, yet it has the highest subscription renewal rate of any magazine in the country. A privately owned company, it is thought to be turning a profit of around $10m. Editorial decisions there are never made by focus groups.

If you wrote a plan for a magazine and said you thought you could make a profit by publishing 8,000-word pieces on the future of various African nations, hefty analyses of the pension system and a three-part series on global warming, hordes of people would laugh in your face…

No focus group is ever involved in an editorial decision. As [editor David Remnick] puts it, it doesn’t take a genius to work out that one hundred per cent of his readers are not going to get home from work, put their keys down and say: You know, honey, what I need to do now is read 10,000 words on Congo. ‘So you throw it out there, and you hope that there are some things that people will immediately read – cartoons, shorter things, Anthony Lane, Talk of the Town. And then, eventually, the next morning on the train, somebody sees this piece, and despite its seeming formidableness, they read it.’

A stripped down formula brings profits to The Week
And then there’s the success of The Week. Its inspiration: Time magazine’s first issue in 1923 which called for 100 articles – each one less than 400 words – in each week’s issue. That is just one of the many approaches The Week is taking that are completely different than other magazines…

Most weekly news magazines: Hundreds of employees.
The Week: 18 employees at the magazine, 15 at the site.

Competitors: Heavy essays.
The Week: 100 word news bites in simple language.

Competitors: Artful photo spreads.
The Week: Small photographs and minimalist graphics.

Competitors: Expand or reduce editorial content based on ad sales each week.
The Week: Limits the number of ad pages it sells to 20.

Competitors: Expensive reporting and guest columnists.
The Week: No bylines, content is synopses of reporting by other news organizations.

Competitors: Rely on both newsstand sales and subscribers.
The Week: Relies on subscribers for all but a tiny sliver of circulation revenue.

With this approach, The Week is profitable and growing steadily. It’s on track to make $6.3 million this year and its total circulation has grown by 5x since it launched in 2001. (It’s not doing any original reporting though, so you could make a case that it’s just piggybacking on the efforts of others.)

What’s funny is how those numbers aren’t big enough for others in the industry. Mark Edmiston, a former Newsweek president and founder of Nomad Editions, is quoted as saying, “This is not a multimillion-circulation publication, and that’s where you’re going to hit the profits…It doesn’t have a mass market appeal, nor do I ever think it will. It’s very difficult to generate a $30 million, $40 million profit when you’re that small.”

Newsflash: When you’re that small, you don’t NEED to generate $40 million in profit. That’s the nice thing about being small. 300 employees generating $30 million in profit – the multimillion-circulation publication model – is $100,000 per employee. With 32 employees generating $6.3 million, The Week is generating nearly $200,000 per employee. If you’re making twice as much per staffer as your competition, that ain’t too shabby.

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