TC50 startup SeatGeek raises money(techcrunch.com) |
TC50 startup SeatGeek raises money(techcrunch.com) |
Paul asked why they were helping other people buy tickets rather than using their secret price prediction algorithm to arbitrage them and make all the money themselves (assuming the variance is high enough).
They didn't have a good answer to that, although it's plausible to me that the variance is smaller than the transaction costs. But it's a bit like knowing about Black-Scholes 10 years before anyone else and sitting on it.
Andreessen asked them what their TAM was, and it seemed like they didn't even know what that meant. It was pretty bad; obviously their business isn't going to capture 100% of the secondary market, because most of the money is made by the people actually selling the tickets. At most you'd only make some % of that.
In any case, it's good to see them moving forward. TC50 must have helped them refine their pitch a lot, and given the quant nature of the investors they must have seen an opportunity that wasn't totally apparent from their TC50 demo.
As far as TAM goes, well I do not think it is fatal if a start up does not know what that particular acronym means. A good investor would calculate that themselves anyway. One would have to be very gullible to believe the TAM estimations of the average company looking for funding (they all say everything is a 100 billion dollar market).
TAM answers the question, "In the best of all possible worlds, how much money would you make?"
As an entrepreneur you'd better have a good, if not totally accurate, answer to that question. At the very least it shows investors how well you've segmented and sized your target market.
With regards to the TAM, I totally agree that we dropped the ball when we were on stage. I guess the pressure of being under the bright lights got to us. But we do indeed know our TAM; if you happen to be interested I can send you an Excel model that calculates it.
It was just rough to watch the video -- I actually cringed.
Participating in TC50 is not as prestigious as participating in YC, but it is not trivial either. As a reader, I care about whether a company launched at TC50.
The "TC50 startup" thing just seems a bit like newspapers who constantly feel the need to remind you that they broke certain stories "As previously exclusively reported in this very paper" etc.
Just because someone launched at a certain venue, doesn't mean that venue can really claim any ownership. But then it's a common enough thing - you get stars/singers/actors who are constantly labeled as 'being discovered by X' which must be pretty irritating for them.
sorry, went off on a rant there :/ just my 2c
To quote the Clash,
"If Adolph Hitler, flew in today.. They'd send a limousine anyways"